Results: LATAM Airlines Group S.A. Exceeded Expectations And The Consensus Has Updated Its Estimates

Investors in LATAM Airlines Group S.A. (SNSE:LTM) had a good week, as its shares rose 2.5% to close at CL$13.18 following the release of its third-quarter results. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at US$3.3b, statutory earnings beat expectations by a notable 43%, coming in at US$0.0005 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for LATAM Airlines Group

Taking into account the latest results, the most recent consensus for LATAM Airlines Group from nine analysts is for revenues of US$14.3b in 2025. If met, it would imply a decent 12% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 33% to US$0.0017. Before this earnings report, the analysts had been forecasting revenues of US$14.3b and earnings per share (EPS) of US$0.0016 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of CL$19.91, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on LATAM Airlines Group, with the most bullish analyst valuing it at CL$27.19 and the most bearish at CL$15.54 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the LATAM Airlines Group's past performance and to peers in the same industry. We would highlight that LATAM Airlines Group's revenue growth is expected to slow, with the forecast 9.7% annualised growth rate until the end of 2025 being well below the historical 14% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.4% annually. Even after the forecast slowdown in growth, it seems obvious that LATAM Airlines Group is also expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around LATAM Airlines Group's earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at CL$19.91, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for LATAM Airlines Group going out to 2026, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 2 warning signs for LATAM Airlines Group (1 doesn't sit too well with us!) that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.