LATAM Airlines Group SA Sponsored ADR (LTM) AI Stock Analysis

• Market Cap: $11.47B
• Dividend Yield: 1.71%
• Average Volume (3M): 563.48K
• Price to Earnings (P/E): 10.8
• Beta (1Y): 0.65
• Revenue Growth: 6.41%
• EPS Growth: 49.58%
• Country: US
• Employees: 39,005
• Sector: Industrials
• Sector Strength: 83
• Industry: Airlines, Airports & Air Services
• EPS (TTM): 1.18
• Shares Outstanding: 302,218,930
• 10 Day Avg. Volume: 667,938
• 30 Day Avg. Volume: 563,483
• PEG Ratio: 0.14
• Price to Book (P/B): 11.52
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 4.94
• Enterprise Value/Market Cap: 2.12
• Enterprise Value/Revenue: 0.48
• Enterprise Value/Gross Profit: 7.26
• Enterprise Value/Ebitda: 2.89
• 1Y Price Target: $42.45
• Price Target Upside: 13.93% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 71 Outperform
• Price Target: $42.00 ▲(12.72%Upside)

LATAM Airlines' strong financial performance, marked by robust profit margins and cash flow, is a major strength, countered by high debt reliance. Technical indicators show bullish trends but caution due to overbought signals. The valuation is reasonable, adding stability to the stock's appeal.

Positive Factors

Dollar and Earnings

A weaker dollar should benefit large cap US relative EPS revisions.

Tariff Deal

Incrementally positive news on a potential tariff deal with China and hope for a more dovish Fed lifted stocks.

Negative Factors

Earnings and Confidence

Further deterioration in earnings and/or corporate confidence could lead to a labor cycle and negatively impact equities.

Policy Uncertainty

The back and forth on policy is likely to exacerbate uncertainty for businesses and consumers.

LATAM Airlines Group SA Sponsored ADR Business Overview & Revenue Model

Company Description

LATAM Airlines Group SA Sponsored ADR (LTM) is a leading airline holding company in Latin America, headquartered in Santiago, Chile. It operates under the LATAM brand, resulting from the merger of LAN Airlines and TAM Airlines. The company provides passenger and cargo air transportation services throughout Latin America and internationally, with a strong presence in countries such as Brazil, Chile, Colombia, and Peru. LATAM Airlines offers a comprehensive range of flight options to various destinations, making it one of the most prominent airlines in the region.

How the Company Makes Money

LATAM Airlines Group SA generates revenue primarily through the sale of airline tickets for passenger travel, which constitutes the majority of its income. The company also earns revenue from its cargo operations, offering freight services across its extensive network of destinations. Ancillary services, such as baggage fees, seat selection, in-flight sales, and loyalty programs, contribute additional income. Revenue is further supported by strategic partnerships and alliances with other airlines that enhance network connectivity and offer codeshare agreements, expanding LATAM's reach and customer base. Additionally, LATAM benefits from partnerships with travel agencies and corporate clients, which facilitate bulk ticket sales and long-term contracts.

LATAM Airlines Group SA Sponsored ADR Financial Statement Overview

Summary

LATAM Airlines shows strong profit margins and cash generation, with improved leverage. Despite these improvements, significant reliance on debt could pose risks in adverse market conditions.

Income Statement

The income statement reveals a strong recovery trajectory for LATAM Airlines, with revenue increasing to $12.91 billion (TTM) from $12.83 billion annually. This growth is supported by a robust gross profit margin of 25.88% and a net profit margin of 8.32%. The consistent EBIT and EBITDA margins of 13.21% and 18.24% respectively, indicate operational efficiency. However, the revenue growth rate decelerated compared to previous years, which could be a consideration for future performance.

Balance Sheet

The balance sheet shows improved financial stability, with stockholders' equity increasing to $950 million. The debt-to-equity ratio decreased to 7.46, signifying reduced leverage. The equity ratio of 5.99% suggests that the company still relies heavily on debt, which poses a risk if market conditions worsen. The return on equity (ROE) is strong at 113.05%, reflecting effective utilization of equity to generate profit.

Cash Flow

Cash flow analysis showcases a solid performance with an operating cash flow to net income ratio of 3.04, indicating healthy cash generation relative to profitability. Free cash flow improved to $1.63 billion (TTM), though the free cash flow growth rate has decelerated. The free cash flow to net income ratio of 1.52 further emphasizes efficient cash utilization. However, high capital expenditures could impact future cash flows.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.97B	12.83B	11.64B	9.52B	4.88B	4.33B
	Gross Profit
-1.08B	3.27B	2.82B	2.48B	-79.47M	-444.11M
	EBIT
-2.57B	1.54B	1.08B	134.87M	-3.43B	-1.67B
	EBITDA
-1.64B	2.34B	1.28B	2.26B	-3.34B	-4.52B
	Net Income Common Stockholders
-2.74B	976.97M	581.83M	1.34B	-4.65B	-4.55B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.55B	1.96B	1.85B	1.72B	1.12B	1.75B
	Total Assets
20.23B	15.25B	14.67B	13.21B	13.31B	15.65B
	Total Debt
10.56B	7.15B	7.04B	6.78B	10.40B	10.85B
	Net Debt
9.44B	5.19B	5.32B	5.57B	9.35B	9.16B
	Total Liabilities
16.86B	14.54B	14.23B	13.18B	20.38B	18.09B
	Stockholders Equity
3.27B	723.27M	450.30M	42.28M	-7.06B	-2.44B
Cash Flow		Free Cash Flow
-534.56M	1.69B	1.40B	-733.86M	-859.86M	-894.39M
	Operating Cash Flow
-1.04B	3.11B	2.26B	96.80M	-184.10M	-494.70M
	Investing Cash Flow
-123.92M	-1.17B	-659.50M	-748.96M	-542.65M	33.61M
	Financing Cash Flow
1.34B	-1.56B	-1.15B	854.96M	109.64M	1.12B

LATAM Airlines Group SA Sponsored ADR Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 37.26
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LTM, the sentiment is Positive. The current price of 37.26 is below the 20-day moving average (MA) of 38.23, above the 50-day MA of 34.39, and above the 200-day MA of 29.46, indicating a neutral trend. The MACD of 1.00 indicates Positive momentum. The RSI at 55.61 is Neutral, neither overbought nor oversold. The STOCH value of 15.92 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LTM.

LATAM Airlines Group SA Sponsored ADR Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CPA	82 Outperform	$4.27B	7.04	26.07%	6.21%	-1.06%	5.86%
UAL	79 Outperform	$25.64B	6.72	33.57%	―	5.31%	35.95%
LTM	71 Outperform	$11.47B	10.75	138.69%	1.71%	6.41%	49.58%
LUV	68 Neutral	$18.35B	38.24	5.63%	2.29%	3.26%	27.77%
Sector *	66 Neutral	$4.46B	12.15	5.40%	4.71%	4.16%	-11.97%
AAL	61 Neutral	$7.19B	12.19	-21.27%	―	1.92%	36.07%
JBLU	43 Neutral	$1.49B	―	-11.30%	―	-3.02%	66.90%