Many stocks have been testing new highs in 2020, and one of the most notable is LATAM Airlines Group S.A. (LTM). Currently, LTM is trading at $2.91 and the avg recommendation for the stock is Hold.
To add more color to this target, the company’s high over the last year is $12.15 and the low is $1.00. Over the last 52 weeks, LTM is down -76.06% while the S&P 500 is up 1.21%. The catalyst for this interesting swing was the company’s recent earnings report.
A Notable Earnings Report
In the last quarter, LTM reported a profit of $419.64 million. LATAM Airlines Group S.A. also saw revenues increase to $2.27 billion. In addition, LTM has free cash flow of $46.61 million as of 03-2020 The company’s EBITDA came in at -$1.79 billion which compares well with its peers.
LTM booked profit margins of -18.90%, its Return on Equity (ROE) is -82.30%, and its Return on Assets is -9.40%. All told, it is clear that, LTM needs to be on your watchlist.
About LATAM Airlines Group S.A.
If readers are unfamiliar, 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. On May 26, 2020, LATAM Airlines Group S.A., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York.
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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. LTM has a short ratio of 0.78 and outstanding shares of 606.41M.
LTM has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 34.95 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at -3.08. LATAM Airlines Group S.A. LTM also noted assets of $17.48 billion at the end of the last quarter. Investors should also keep an eye on sector updates as LTM has historically followed its peers on positive news.
All told, LATAM Airlines Group S.A. LTM has strung together solid data and demonstrated underlying fundamentals. At its current valuation, LTM represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.
LATAM Airlines Group S.A. LTM is now commanding a market cap of 1.57B and a float of 291.39M. LTM is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of LTM stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in LTM, either long or short, and we have not been compensated for this article.