LATAM Airlines Group Valuation

Q: What is the Fair Price of LTM when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

LTM ($27.94) is trading below our estimate of [[fair value]] ($103.71)

Is LTM undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Below Fair Value
Significantly Below Fair Value
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of LTM when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: LTM ($27.94) is trading below our estimate of fair value ($103.71)

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

Key Valuation Metric

Which metric is best to use when looking at relative valuation for LTM?

Key metric: As LTM is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for LTM. This is calculated by dividing LTM's market cap by their current earnings.
What is LTM's PE Ratio?
PE Ratio	10.7x
Earnings	US$787.99m
Market Cap	US$8.42b

LTM key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1x
Enterprise Value/EBITDA	5.9x
PEG Ratio	0.5x

Price to Earnings Ratio vs Peers

How does LTM's PE Ratio compare to its peers?

The above table shows the PE ratio for LTM vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PE	Estimated Growth	Market Cap
Peer Average	20.2x
AAL American Airlines Group	35x	39.5%	US$9.6b
ALK Alaska Air Group	20.8x	30.1%	US$6.7b
CPA Copa Holdings	6.1x	7.3%	US$3.9b
SKYW SkyWest	18.9x	15.8%	US$4.6b
LTM LATAM Airlines Group	10.7x	21.9%	US$8.2t

Price-To-Earnings vs Peers: LTM is good value based on its Price-To-Earnings Ratio (10.7x) compared to the peer average (20.2x).

Price to Earnings Ratio vs Industry

How does LTM's PE Ratio compare vs other companies in the Global Airlines Industry?

4 Companies	Price / Earnings	Estimated Growth	Market Cap

4 Companies		Estimated Growth	Market Cap

No more companies

Price-To-Earnings vs Industry: LTM is good value based on its Price-To-Earnings Ratio (10.7x) compared to the Global Airlines industry average (10.8x).

Price to Earnings Ratio vs Fair Ratio

What is LTM's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

LTM PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	10.7x
Fair PE Ratio	14.3x

Price-To-Earnings vs Fair Ratio: LTM is good value based on its Price-To-Earnings Ratio (10.7x) compared to the estimated Fair Price-To-Earnings Ratio (14.3x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.