DB:LFL

Stock Analysis Report

LATAM Airlines Group

Executive Summary

LATAM Airlines Group S.A., together with its subsidiaries, provides passenger and cargo air transportation services in Peru, Argentina, the United States, Europe, Colombia, Brazil, Ecuador, Chile, the Asia Pacific, and rest of Latin America.

Snowflake

Fundamentals

Reasonable growth potential and fair value.


Similar Companies

Share Price & News

How has LATAM Airlines Group's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-6.3%

DB:LFL

-0.9%

DE Airlines

2.6%

DE Market


1 Year Return

-8.9%

DB:LFL

-36.2%

DE Airlines

-9.6%

DE Market

LFL outperformed the Airlines industry which returned -36.9% over the past year.

LFL outperformed the Market in Germany which returned -10.8% over the past year.


Share holder returns

LFLIndustryMarket
7 Day-6.3%-0.9%2.6%
30 Day-9.5%-9.9%-3.0%
90 Day3.4%-10.0%-1.4%
1 Year-8.5%-8.9%-31.8%-36.2%-6.8%-9.6%
3 Year8.8%7.9%4.1%-6.9%11.0%1.5%
5 Year-15.5%-16.2%16.9%0.6%25.6%8.2%

Price Volatility Vs. Market

How volatile is LATAM Airlines Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is LATAM Airlines Group undervalued based on future cash flows and its price relative to the stock market?

>50%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

LATAM Airlines Group's share price is below the future cash flow value, and at a moderate discount (> 20%).

LATAM Airlines Group's share price is below the future cash flow value, and at a substantial discount (> 40%).


Price Based on Earnings

LATAM Airlines Group is overvalued based on earnings compared to the Europe Airlines industry average.

LATAM Airlines Group is overvalued based on earnings compared to the Germany market.


Price Based on Expected Growth

LATAM Airlines Group is good value based on expected growth next year.


Price Based on Value of Assets

LATAM Airlines Group is overvalued based on assets compared to the Europe Airlines industry average.


Next Steps

Future Growth

How is LATAM Airlines Group expected to perform in the next 1 to 3 years based on estimates from 13 analysts?

50.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

LATAM Airlines Group's revenue is expected to grow by 6.6% yearly, however this is not considered high growth (20% yearly).

LATAM Airlines Group's earnings are expected to grow significantly at over 20% yearly.

LATAM Airlines Group's revenue growth is expected to exceed the Germany market average.

LATAM Airlines Group's earnings growth is expected to exceed the Germany market average.

LATAM Airlines Group's earnings growth is expected to exceed the low risk savings rate of 0.2%.


Earnings per Share Growth Estimates


Future Return on Equity

LATAM Airlines Group is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


Next Steps

Past Performance

How has LATAM Airlines Group performed over the past 5 years?

65.7%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

LATAM Airlines Group has delivered over 20% year on year earnings growth in the past 5 years.

LATAM Airlines Group's 1-year earnings growth is less than its 5-year average (55.6% vs 65.7%)

LATAM Airlines Group's earnings growth has exceeded the Europe Airlines industry average in the past year (55.6% vs -18.5%).


Return on Equity

LATAM Airlines Group has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

LATAM Airlines Group used its assets less efficiently than the Europe Airlines industry average last year based on Return on Assets.


Return on Capital Employed

LATAM Airlines Group's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is LATAM Airlines Group's financial position?


Financial Position Analysis

LATAM Airlines Group's short term (1 year) commitments are greater than its holdings of cash and other short term assets.

LATAM Airlines Group's long term commitments exceed its cash and other short term assets.


Debt to Equity History and Analysis

LATAM Airlines Group's level of debt (191.5%) compared to net worth is high (greater than 40%).

The level of debt compared to net worth has increased over the past 5 years (116.7% vs 191.5% today).

Debt is well covered by operating cash flow (27.7%, greater than 20% of total debt).

Interest payments on debt are not well covered by earnings (EBIT is 1.7x annual interest expense, ideally 3x coverage).


Balance Sheet

High level of physical assets or inventory.

Debt is not covered by short term assets, assets are 0.6x debt.


Next Steps

Dividend

What is LATAM Airlines Group's current dividend yield, its reliability and sustainability?

0.54%

Expected Dividend Yield


Dividend Yield and Payments Analysis

LATAM Airlines Group's pays a lower dividend yield than the bottom 25% of dividend payers in Germany (1.55%).

LATAM Airlines Group's dividend is below the markets top 25% of dividend payers in Germany (4.22%).

Dividends per share have been volatile in the past 10 years (annual drop of over 20%).

Dividends per share have fallen over the past 10 years.


Current Payout to Shareholders

Dividends paid are well covered by earnings (3.2x coverage).


Future Payout to Shareholders

No need to calculate the sustainability of LATAM Airlines Group's dividends in 3 years as they are not expected to pay a notable one for Germany.


Next Steps

Management

What is the CEO of LATAM Airlines Group's salary, the management and board of directors tenure and is there insider trading?

3.8yrs

Average management tenure


CEO

Enrique Cueto Plaza (60yo)

7.2yrs

Tenure

0

Mr. Enrique Cueto Plaza has been the Chief Executive Officer of LATAM Airlines Group S.A. since June 2012 and has been in this position since the combination between LAN and TAM in June 2012. Mr. Cueto Pla ...


Management Age and Tenure

3.8yrs

Average Tenure

52yo

Average Age

The tenure for the LATAM Airlines Group management team is about average.


Board Age and Tenure

2.3yrs

Average Tenure

58yo

Average Age

The average tenure for the LATAM Airlines Group board of directors is less than 3 years, this suggests a new board.


Insider Trading

No 3 month open market individual insider trading information.


Ownership Breakdown


Management Team

  • Enrique Cueto Plaza (60yo)

    Chief Executive Officer

    • Tenure: 7.2yrs
  • Andrés Del Valle Eitel (60yo)

    Senior Vice President of Corporate Finance & Investor Relations

    • Tenure: 0.0yrs
  • Emilio del Real Sota (54yo)

    Senior Vice-President of Human Resources

    • Tenure: 14.0yrs
  • Jerome Paul Jacques Cadier (49yo)

    Chief Executive Officer of LATAM Airlines Brazil

    • Tenure: 0.0yrs
  • Ramiro Diego Alfonsín Balza

    CFO & Senior VP of Financial Fleet

    • Tenure: 3.1yrs
  • Roberto Alvo Milosawlewitsch (50yo)

    Senior Vice President of Commercial

    • Tenure: 2.3yrs
  • Cláudia Sender Ramirez (44yo)

    Senior Vice President of Customers

    • Tenure: 2.3yrs
  • Juan Carlos Menció

    Senior Vice President of Legal Affairs & Compliance

    • Tenure: 4.9yrs
  • Hernán Pasman

    COO & Senior VP of Operations

    • Tenure: 3.8yrs

Board Members

  • Ignacio Cueto Plaza (55yo)

    Chairman

    • Tenure: 2.3yrs
    • Compensation: US$46.84k
  • Juan José Cueto Plaza (59yo)

    Director

    • Tenure: 2.3yrs
    • Compensation: US$17.46k
  • Henri Philippe Reichstul (70yo)

    Director

    • Tenure: 5.3yrs
    • Compensation: US$24.98k
  • Carlos Alberto Heller Solari (57yo)

    Vice Chairman

    • Tenure: 2.3yrs
    • Compensation: US$15.75k
  • Giles Edward Agutter

    Director

    • Tenure: 2.6yrs
    • Compensation: US$9.78k
  • Eduardo Novoa Castellón

    Independent Director

    • Tenure: 2.3yrs
    • Compensation: US$57.92k
  • Nicolás Eblén Hirmas

    Independent Director

    • Tenure: 2.3yrs
    • Compensation: US$55.45k
  • Sonia J.S. Villalobos

    Director

    • Tenure: 1.0yrs
    • Compensation: US$11.67k
  • Patrick Horn García

    Independent Director

    • Tenure: 0.3yrs

Company Information

LATAM Airlines Group S.A.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: LATAM Airlines Group S.A.
  • Ticker: LFL
  • Exchange: DB
  • Founded: 1929
  • Industry: Airlines
  • Sector: Transportation
  • Market Cap: CL$3.702t
  • Listing Market Cap: CL$4.697b
  • Shares outstanding: 606.41m
  • Website: https://www.latamairlinesgroup.net

Number of Employees


Location

  • LATAM Airlines Group S.A.
  • Presidente Riesco 5711
  • 20th Floor
  • Santiago
  • Region Metropolitana (Santiago)
  • Chile

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LTMSNSE (Santiago Stock Exchange)YesCommon StockCLCLPJan 1995
LTMNYSE (New York Stock Exchange)SPONS ADR EACH REPR 1 ORDUSUSDNov 1997
LFLDB (Deutsche Boerse AG)SPONS ADR EACH REPR 1 ORDDEEURNov 1997

Biography

LATAM Airlines Group S.A., together with its subsidiaries, provides passenger and cargo air transportation services in Peru, Argentina, the United States, Europe, Colombia, Brazil, Ecuador, Chile, the Asia ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/08/21 20:47
End of Day Share Price2019/08/21 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.