NYSE:LTM

Stock Analysis Report

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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 Analysis

Good value with questionable track record.


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

Stable Share Price: LTM's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-13.7%

LTM

5.0%

US Airlines

1.0%

US Market


1 Year Return

-69.2%

LTM

-54.6%

US Airlines

4.1%

US Market

Return vs Industry: LTM underperformed the US Airlines industry which returned -55.1% over the past year.

Return vs Market: LTM underperformed the US Market which returned 3.7% over the past year.


Shareholder returns

LTMIndustryMarket
7 Day-13.7%5.0%1.0%
30 Day-25.9%1.1%5.4%
90 Day-66.6%-50.9%-5.7%
1 Year-68.0%-69.2%-54.0%-54.6%6.5%4.1%
3 Year-76.0%-77.0%-56.0%-57.7%28.3%19.8%
5 Year-67.6%-69.0%-41.5%-44.7%52.2%35.0%

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

Valuation

Is LATAM Airlines Group undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: LTM ($2.58) is trading below our estimate of fair value ($13.94)

Significantly Below Fair Value: LTM is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: LTM is poor value based on its PE Ratio (8.3x) compared to the Airlines industry average (6.8x).

PE vs Market: LTM is good value based on its PE Ratio (8.3x) compared to the US market (15x).


Price to Earnings Growth Ratio

PEG Ratio: LTM's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: LTM is good value based on its PB Ratio (0.5x) compared to the US Airlines industry average (0.7x).


Next Steps

Future Growth

How is LATAM Airlines Group forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

-11.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LTM's earnings are forecast to decline over the next 3 years (-11.1% per year).

Earnings vs Market: LTM's earnings are forecast to decline over the next 3 years (-11.1% per year).

High Growth Earnings: LTM's earnings are forecast to decline over the next 3 years.

Revenue vs Market: LTM's revenue is expected to decline over the next 3 years (-1.4% per year).

High Growth Revenue: LTM's revenue is forecast to decline over the next 3 years (-1.4% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LTM is forecast to be unprofitable in 3 years.


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

Quality Earnings: LTM has high quality earnings.

Growing Profit Margin: LTM's current net profit margins (1.9%) are lower than last year (3.1%).


Past Earnings Growth Analysis

Earnings Trend: LTM has become profitable over the past 5 years, growing earnings by 65.7% per year.

Accelerating Growth: LTM's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: LTM had negative earnings growth (-38.5%) over the past year, making it difficult to compare to the Airlines industry average (-14.4%).


Return on Equity

High ROE: LTM's Return on Equity (6.3%) is considered low.


Next Steps

Financial Health

How is LATAM Airlines Group's financial position?


Financial Position Analysis

Short Term Liabilities: LTM's short term assets ($4.0B) do not cover its short term liabilities ($7.0B).

Long Term Liabilities: LTM's short term assets ($4.0B) do not cover its long term liabilities ($11.0B).


Debt to Equity History and Analysis

Debt Level: LTM's debt to equity ratio (174.6%) is considered high.

Reducing Debt: LTM's debt to equity ratio has increased from 158.1% to 174.6% over the past 5 years.

Debt Coverage: LTM's debt is well covered by operating cash flow (51.7%).

Interest Coverage: LTM's interest payments on its debt are not well covered by EBIT (1.4x coverage).


Balance Sheet


Next Steps

Dividend

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

3.60%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: LTM's dividend (3.6%) is higher than the bottom 25% of dividend payers in the US market (1.75%).

High Dividend: LTM's dividend (3.6%) is low compared to the top 25% of dividend payers in the US market (4.73%).


Stability and Growth of Payments

Stable Dividend: LTM's dividend payments have been volatile in the past 10 years.

Growing Dividend: LTM's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (30%), LTM's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: LTM is not forecast to pay a dividend in 3 years.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.6yrs

Average management tenure


CEO

Roberto Alvo Milosawlewitsch (50yo)

0.17

Tenure

Mr. Roberto Alvo Milosawlewitsch has been Chief Executive Officer of LATAM Airlines Group S.A. since March 31, 2020. He served as Chief Commercial Officer of LATAM Airlines Group S.A until March 31, 2020.  ...


Leadership Team

NamePositionTenureCompensationOwnership
Roberto Alvo Milosawlewitsch
Chief Executive Officer0.17yrno datano data
Ramiro Diego Alfonsín Balza
Chief Financial Officer3.83yrsno datano data
Hernán Pasman
VP of Operations4.58yrsno datano data
Andrés Del Valle Eitel
Senior Vice President of Corporate Finance & Investor Relationsno datano datano data
Juan Carlos Menció
Vice President of Legal Affairs & Compliance5.67yrsno datano data
Emilio del Real Sota
Vice President of Human Resources14.75yrsno datano data
Jerome Paul Jacques Cadier
Chief Executive Officer of LATAM Airlines Brazilno datano datano data

4.6yrs

Average Tenure

52yo

Average Age

Experienced Management: LTM's management team is considered experienced (4.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Enrique Ostalé Cambiaso
Director0.083yrno datano data
Enrique Cueto Plaza
Director27.33yrsno datano data
Ignacio Cueto Plaza
Chairman3yrsUS$59.13kno data
Henri Philippe Reichstul
Director6.08yrsUS$29.05kno data
Giles Edward Agutter
Director3.33yrsUS$16.55kno data
Eduardo Novoa Castellón
Independent Director3.08yrsUS$73.07kno data
Nicolás Eblén Hirmas
Independent Director3.08yrsUS$73.07kno data
Sonia J.S. Villalobos
Director1.75yrsUS$30.32kno data
Patrick Horn García
Independent Director1.08yrsUS$50.46kno data

3.1yrs

Average Tenure

59.5yo

Average Age

Experienced Board: LTM's board of directors are considered experienced (3.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

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: LTM
  • Exchange: NYSE
  • Founded: 1929
  • Industry: Airlines
  • Sector: Transportation
  • Market Cap: CL$1.276t
  • Listing Market Cap: CL$1.585b
  • Shares outstanding: 606.41m
  • Website: https://www.latamairlinesgroup.net

Number of Employees


Location

  • LATAM Airlines Group S.A.
  • Presidente Riesco 5711
  • 20th Floor
  • Santiago de Chile
  • 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 Pacific, and rest of Latin America. The company provides passenger transport services to approximately 145 destinations in 26 countries, as well as cargo services to approximately 151 destinations in 29 countries; and operates loyalty programs. As of December 31, 2019, it operated a fleet of 331 aircraft, which include 320 passenger aircraft and 11 cargo aircraft; and subleased 11 aircraft comprising 10 passenger aircraft and 1 cargo aircraft to third parties. The company was formerly known as LAN Airlines S.A. and changed its name to LATAM Airlines Group S.A. in June 2012. LATAM Airlines Group S.A. was founded in 1929 and is headquartered in Santiago, Chile. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/05/25 02:15
End of Day Share Price2020/05/22 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.