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LATAM Airlines Group SA Sponsored ADR
(NYSE:LTM)
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Rating:75Outperform
Price Target:
$65.00
▲(29.61% Upside)
Action:Reiterated
Date:08/06/26
The score is driven by strong profitability and free-cash-flow generation and a positive, guidance-upgraded earnings call. Technicals also support the trend with price above major moving averages and positive MACD. The key offset is elevated balance-sheet leverage for a cyclical airline, which keeps financial risk meaningful despite improved operations.
Positive Factors
Cash generation
Consistent positive operating and free cash flow provides durable internal funding for debt reduction, fleet investment and working capital. Over multiple years this strengthens financial flexibility, supports capital returns and funds growth without sole reliance on external financing.
Negative Factors
High leverage
A debt-heavy capital structure constrains strategic optionality in a cyclical industry: interest costs and refinancing needs amplify earnings volatility and limit room for capital allocation. Even with improving equity, high leverage leaves the company sensitive to shocks and slows deleveraging pace.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation
Consistent positive operating and free cash flow provides durable internal funding for debt reduction, fleet investment and working capital. Over multiple years this strengthens financial flexibility, supports capital returns and funds growth without sole reliance on external financing.
Read all positive factors
LATAM Airlines Group SA Sponsored ADR (LTM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$14.97B
Dividend Yield2.93%
Average Volume (3M)761.59K
Price to Earnings (P/E)9.7
Beta (1Y)0.87
Revenue Growth20.16%
EPS Growth39.18%
CountryUS
Employees42,082
SectorGeneral
Sector StrengthN/A
IndustryAirlines, Airports & Air Services
Share Statistics
EPS (TTM)5.20
Shares Outstanding287,108,000
10 Day Avg. Volume718,998
30 Day Avg. Volume761,592
Financial Highlights & Ratios
PEG Ratio0.19
Price to Book (P/B)11.83
Price to Sales (P/S)1.12
P/FCF Ratio10.71
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$70.00Price Target Upside39.58% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)4.7
Revenue Forecast (FY)$17.17B
LATAM Airlines Group SA Sponsored ADR Business Overview & Revenue Model
Company Description
LATAM Airlines Group S.A., encompassing its various subsidiaries, specializes in providing both passenger and freight air transport services. The company's vast operational footprint extends across multiple continents, covering Chile, Peru, Ecuado...
How the Company Makes Money
LATAM Airlines Group primarily makes money by selling air transportation and related services. Key revenue streams include: (1) Passenger revenue: income from selling airline tickets for domestic and international flights, with pricing influenced ...
LATAM Airlines Group SA Sponsored ADR Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 11, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly positive outlook: LATAM delivered profitable results, strong revenue growth, improved unit revenues and solid cash generation during an extreme fuel-cost shock, reinstated and improved full-year guidance, and announced strategic fleet expansion and a share buyback program. Key challenges remain material, including a sharp YoY fuel cost increase (~93%, >$700M impact), negative hedging effects from premium payments, regional demand softness in certain markets, and ongoing fuel price volatility. However, the financial resilience (liquidity >$4.2B, leverage 1.5x), commercial execution (RASK gains, Premium and LATAM Pass strength), and upgraded guidance indicate that the highlights significantly outweigh the lowlights.Positive Updates
Profitability Despite Fuel Shock
Adjusted operating margin of 5.4% in Q2 2026 and positive net income of $125 million, achieved despite an extreme fuel cost environment.
Negative Updates
Severe Jet Fuel Cost Shock
All-in average fuel price including hedges increased by more than 80% YoY, driving a 93% increase in total fuel costs and creating an estimated impact in excess of $700 million in Q2 alone.
Read all updates
Q2-2026 Updates
Positive
Negative
Profitability Despite Fuel Shock
Adjusted operating margin of 5.4% in Q2 2026 and positive net income of $125 million, achieved despite an extreme fuel cost environment.
Read all positive updates
Company Guidance
LATAM reinstated and improved its full‑year 2026 guidance: consolidated capacity growth of 9–10% YoY, total revenues of $17.3–$17.7 billion, adjusted EBITDA of $4.1–$4.4 billion (midpoint +$250 million vs. prior guidance), passenger CASK ex‑fuel of $0.045–$0.047 (assumes BRL 5.15/USD), updated fuel assumptions of $147/barrel for Q3 and $130/barrel for Q4 (vs. prior $170/$150), year‑end liquidity of at least $4.7 billion and adjusted net leverage ≤1.6x; management noted Q2 was likely the most challenged quarter and highlighted Q2 results including nearly $4.2 billion revenues, $476 million adjusted operating cash flow, positive net income of $125 million, Q2 capacity +8.9%, consolidated load factor ~81.8% and passenger RASK +17.5%; the board also approved a share repurchase program (up to 5% of shares over ≤5 years) and completed the remaining dividend to satisfy the 30% mandatory 2025 payout.LATAM Airlines Group SA Sponsored ADR Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
48
Neutral
Cash Flow
76
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 15.88B | 14.27B | 12.83B | 11.64B | 9.36B | 4.88B |
| Gross Profit | 4.28B | 4.16B | 3.27B | 2.82B | 1.26B | -79.47M |
| EBITDA | 2.95B | 3.28B | 2.61B | 2.28B | 3.22B | -2.35B |
| Net Income | 1.56B | 1.46B | 976.97M | 581.83M | 1.34B | -4.65B |
Balance Sheet | ||||||
| Total Assets | 19.65B | 17.64B | 15.25B | 14.67B | 13.21B | 13.29B |
| Cash, Cash Equivalents and Short-Term Investments | 2.70B | 2.17B | 2.01B | 1.85B | 1.35B | 1.12B |
| Total Debt | 9.03B | 8.09B | 7.15B | 7.04B | 6.87B | 10.54B |
| Total Liabilities | 17.66B | 16.30B | 14.54B | 14.23B | 13.18B | 20.36B |
| Stockholders Equity | 2.00B | 1.35B | 723.27M | 450.30M | 42.28M | -7.06B |
Cash Flow | ||||||
| Free Cash Flow | 1.93B | 1.49B | 1.69B | 1.47B | -733.86M | -859.86M |
| Operating Cash Flow | 3.50B | 3.26B | 3.11B | 2.26B | 96.80M | -184.10M |
| Investing Cash Flow | -1.41B | -1.71B | -1.17B | -659.50M | -748.96M | -542.65M |
| Financing Cash Flow | -1.54B | -1.41B | -1.56B | -1.15B | 854.96M | 109.64M |
LATAM Airlines Group SA Sponsored ADR Technical Analysis
Negative
50.15
Price Trends
53.97
Negative
52.09
Positive
52.68
Negative
Market Momentum
-0.23
Positive
44.65
Neutral
3.91
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LTM, the sentiment is Negative. The current price of 50.15 is below the 20-day moving average (MA) of 53.28, below the 50-day MA of 53.97, and below the 200-day MA of 52.68, indicating a bearish trend. The MACD of -0.23 indicates Positive momentum. The RSI at 44.65 is Neutral, neither overbought nor oversold. The STOCH value of 3.91 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LTM.
LATAM Airlines Group SA Sponsored ADR Risk Analysis
LATAM Airlines Group SA Sponsored ADR disclosed 51 risk factors in its most recent earnings report. LATAM Airlines Group SA Sponsored ADR reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
LATAM Airlines Group SA Sponsored ADR Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $58.76B | 14.41 | 19.33% | 0.91% | 10.28% | -12.67% | |
76 Outperform | $5.59B | 8.79 | 22.40% | 4.87% | 14.80% | -1.39% | |
75 Outperform | $14.97B | 9.65 | 98.01% | 3.05% | 20.16% | 39.18% | |
70 Outperform | $40.68B | 11.40 | 22.50% | ― | 8.48% | 6.74% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% | |
54 Neutral | $21.65B | 26.11 | 11.27% | 1.60% | 9.46% | 137.74% | |
46 Neutral | $9.82B | -29.45 | 8.29% | ― | 7.53% | -157.37% |
* General Sector Average
LTM
LATAM Airlines Group SA Sponsored ADR
52.29
7.90
17.80%
CPA
Copa Holdings
133.79
23.09
20.86%
DAL
Delta Air Lines
87.59
27.16
44.94%
LUV
Southwest Airlines
43.35
12.62
41.06%
UAL
United Airlines Holdings
122.26
19.89
19.43%
AAL
American Airlines
14.43
1.26
9.57%
LATAM Airlines Group SA Sponsored ADR Corporate Events
LATAM Airlines Posts Strong 2Q 2026 Results and Expands Brazil Network Amid Volatile Fuel Costs
Aug 4, 2026
LATAM Airlines Group reported its second-quarter 2026 results on August 4, 2026, posting a 5.4% adjusted operating margin and a net income of $125 million, as revenues rose 27.6% year-on-year to $4.18 billion despite sharp increases in fuel costs....
LATAM Airlines Files June 30, 2026 Interim Consolidated Results with U.S. SEC
Aug 4, 2026
LATAM Airlines Group S.A. has filed a Form 6-K with the U.S. Securities and Exchange Commission in August 2026, providing investors with its interim consolidated financial statements as of June 30, 2026. The filing, signed on August 4, 2026 by Chi...
LATAM Airlines Launches Five-Year Share Buyback Program Covering Up to 5% of Capital
Aug 3, 2026
On August 3, 2026, LATAM Airlines Group S.A. disclosed that an Extraordinary Shareholders’ Meeting approved a new share repurchase program covering up to 5% of its subscribed and paid share capital, equivalent to 28,710,799,185 shares out of...
LATAM Airlines Expands June Capacity and Launches São Paulo–Brussels Route
Jul 10, 2026
In June 2026, LATAM Airlines Group increased consolidated passenger capacity by 7.5% year-on-year, led by a 9.1% rise in international operations and mid-single-digit growth in domestic markets in Brazil and across Chile, Colombia, Ecuador and Per...
LATAM Airlines Calls August Shareholder Vote on New Share Repurchase Program
Jul 8, 2026
LATAM Airlines Group S.A. is a major Latin American airline based in Santiago, Chile, offering passenger and cargo services across domestic and international routes. The company’s scale and multi-market presence make it an influential player...
LATAM Airlines Lifts Passenger and Cargo Volumes in May 2026 as It Reopens Key Routes
Jun 8, 2026
In May 2026, LATAM Airlines Group transported 7.2 million passengers, up 5.0% year on year, as consolidated capacity rose 10.8% on strong international growth and increased domestic supply in Brazil and Spanish-speaking countries. The group also r...
LATAM Airlines Grows April Traffic and Capacity Despite Slight Load Factor Decline
May 12, 2026
In April 2026, LATAM Airlines Group transported 6.9 million passengers, up 2.8% year-on-year, as consolidated capacity rose 8.3%, led by an 11.6% expansion in international operations and continued growth in domestic markets. Consolidated traffic ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.