Key Takeaways CPA's traffic rose 9.8% in August 2025, with load factor climbing to 88.3% from 85.1% a year ago.Allegiant's traffic rose 12.1%, but load factor slipped to 82.6% as capacity growth outpaced demand.Ryanair carried 21M passengers in August 2025, marking its eighth straight month of traffic growth.The Zacks Airline industry has been benefiting from buoyant air travel demand, both on the domestic and international fronts. Upbeat passenger volumes have always been acting as a tailwind. Higher booki ...

Core Viewpoint - LATAM Airlines Group (LTM) is experiencing strong demand and operational efficiency, leading to impressive share performance, making it an attractive investment opportunity [1] Factors Favoring LTM Stock - The Zacks Consensus Estimate for earnings per share (EPS) has been revised upward by 12.23% for the current year and 11.2% for 2026, indicating broker confidence [2] - LTM shares have surged 59.7% over the past year, significantly outperforming the Zacks Transportation – Airline industry's growth of 3.5% [3] Earnings Performance - LATAM Airlines has a mixed earnings surprise history, with earnings exceeding the Zacks Consensus Estimate in two of the last four quarters, meeting once, and missing once, resulting in an average surprise of 4.04% [5] - LTM currently holds a Zacks Rank 1 (Strong Buy) [5] Industry Context - The airline industry has a Zacks Industry Rank of 76 out of 246, placing it in the top 31%, which is crucial as stock price movements are often influenced by industry performance [6] Growth Factors - LATAM Airlines benefits from strong operational efficiency and demand, with a 9.4% increase in consolidated capacity in August 2025, driven by a 12% rise in international operations, and a 9.1% increase in passenger traffic [7] - The airline transported nearly 7.7 million passengers in August 2025, reflecting a 9.1% increase from August 2024 [8] Customer Experience Enhancements - LATAM Airlines is enhancing customer experience with initiatives such as the launch of South America's first Premium Business suites and fleet-wide Wi-Fi starting in 2026 [8] - The airline has maintained a strong Net Promoter Score (NPS) of 56, rising to 60 among premium travelers, and has received nine Skytrax awards, including Best Airline in South America for six consecutive years [9] Sustainability Efforts - LATAM Airlines is committed to sustainability, implementing fuel-saving APM software and expanding its Avión Solidario program, reinforcing its focus on efficiency and social responsibility [9]

Core Insights - The U.S. Federal Reserve cut interest rates by 25 basis points after nearly nine months, initially boosting investor sentiment, but the S&P 500 ended a three-day rally shortly after [1] - Fed Chair Jerome Powell indicated that stock valuations remain high and the future of rate cuts is uncertain, while the labor market shows signs of slowing with moderating job growth and slightly rising unemployment [2] Value Investing Focus - In the current environment, a value investing approach focusing on quality companies at reasonable prices is particularly relevant [2] - Recommended stocks for value investors include Halozyme Therapeutics, Ranger Energy Services, Buenaventura Mining Company, Affiliated Managers Group, and LATAM Airlines Group, all of which exhibit high earnings yield [3] Earnings Yield Metric - Earnings yield is calculated as (Annual Earnings per Share/Market Price) x 100, indicating the anticipated return from earnings for each dollar invested [4] - A higher earnings yield suggests a stock is underpriced compared to those with lower earnings yield, which are seen as overpriced [4] Market Comparison - Earnings yield can be compared with the 10-year Treasury yield to assess the relative attractiveness of stocks versus bonds; when the market index yield exceeds the Treasury yield, stocks may be undervalued [5] Stock Screening Criteria - A primary screening criterion is an earnings yield greater than 10%, supplemented by estimated EPS growth for the next 12 months being greater than or equal to the S&P 500 [6] - Additional criteria include an average daily volume of at least 100,000 and a current price of $5 or more [7][8] Selected Stocks - Halozyme Therapeutics (HALO) is focused on oncology treatments, with projected earnings growth of 46% and 22.5% for 2025 and 2026, respectively [9] - Ranger Energy Services (RNGR) specializes in onshore well services, with expected earnings growth of 53% and 11.3% for 2025 and 2026 [11] - Buenaventura Mining Company (BVN) anticipates earnings growth of 4.4% and 17.7% for 2025 and 2026 [12] - Affiliated Managers Group (AMG) projects earnings growth of 13% and 15% for 2025 and 2026 [13] - LATAM Airlines Group (LTM) expects earnings growth of 45% and 19% for 2025 and 2026 [14]

Company Overview - LATAM Airlines is the leading airline in Latin America, headquartered in Santiago, Chile [11] - The company filed for Chapter 11 bankruptcy on May 26, 2020, and successfully emerged from bankruptcy on November 3, 2022, as part of a financial restructuring to reduce debt and adapt to challenges from the COVID-19 pandemic [11] - Post-bankruptcy, LATAM emerged with approximately $2.2 billion in liquidity and a 35% reduction in debt, alongside a more resilient operational structure [11] Investment Ratings - LATAM Airlines holds a 1 (Strong Buy) rating on the Zacks Rank, indicating strong investment potential [12] - The company has a VGM Score of A, reflecting its attractiveness across value, growth, and momentum metrics [12] Performance Metrics - LATAM's Momentum Style Score is A, with shares increasing by 6.6% over the past four weeks [12] - For fiscal 2025, two analysts have revised their earnings estimates upwards in the last 60 days, with the Zacks Consensus Estimate increasing by $0.56 to $4.68 per share [12] - LATAM boasts an average earnings surprise of +4%, indicating a positive trend in earnings performance [12] Conclusion - With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, LATAM Airlines is positioned as a strong candidate for investors' consideration [13]

Core Insights - LATAM Airlines Group (LTM) reported a year-over-year increase in revenue passenger-kilometers (RPK) for August 2025, indicating strong air traffic demand [1] - The consolidated capacity of LATAM Airlines increased by 9.4% year-over-year, driven by a 12% increase in international operations and an 11.3% increase in domestic capacity in Brazil [1] - The consolidated load factor improved by 1.1 percentage points to 85.4% in August 2025, as traffic growth outpaced capacity expansion [2][10] - LATAM Airlines transported nearly 7.7 million passengers in August 2025, marking a 9.1% year-over-year increase, with a year-to-date total of 57.1 million passengers [3][10] Traffic and Capacity - LTM's consolidated traffic, measured in RPK, increased by 10.8% year-over-year, reflecting robust demand [2][10] - The increase in traffic was supported by new domestic and international routes, contributing to the overall capacity growth [10] Passenger Metrics - LATAM Airlines' year-to-date passenger count reached 57.1 million, showcasing the airline's recovery and growth trajectory [3][10] - The increase in passenger numbers aligns with the overall positive trend in the airline industry, as seen in other carriers' performance [4][5]

Core Insights - Value investing remains a preferred strategy for identifying strong stocks across various market conditions, focusing on key valuation metrics to find undervalued stocks with profit potential [2][3] Company Analysis: Japan Airlines (JAPSY) - Japan Airlines holds a Zacks Rank of 2 (Buy) and an A grade for Value, with a current P/E ratio of 9.66, significantly lower than the industry average of 12.30 [4] - The stock's P/B ratio is 1.39, which is attractive compared to the industry's average P/B of 3.83, with a historical range of 1.01 to 1.41 over the past year [5] - JAPSY's P/CF ratio stands at 5.08, compared to the industry average of 7.99, indicating a solid cash outlook [6] Company Analysis: LATAM Airlines Group (LTM) - LATAM Airlines Group has a Zacks Rank of 1 (Strong Buy) and an A grade for Value, with a Forward P/E ratio of 9.60 and a PEG ratio of 0.44, both lower than the industry averages of 12.30 and 0.72 respectively [7] - Over the past year, LTM's P/E has fluctuated between 6.73 and 9.60, with a median of 8.44, while its PEG ratio has ranged from 0.37 to 0.85, with a median of 0.58 [8] - The P/B ratio for LATAM Airlines is 16.87, which is significantly higher than the industry average of 3.83, with a historical range of 8.79 to 16.87 [8] Conclusion - Both Japan Airlines and LATAM Airlines Group exhibit strong value characteristics, suggesting they may be undervalued in the current market, supported by their earnings outlook [9]

Allegiant Travel Company (ALGT) - Scheduled traffic increased by 10.3% year-over-year in July 2025, while capacity rose by 11.5% [1] - Load factor decreased to 86.6% from 87.5% a year ago due to capacity expansion outpacing traffic growth [1] - Total departures grew by 11.8% year-over-year in July 2025, but average stage length fell by 0.4% [2] - Allegiant carried 10.1% more passengers system-wide in July 2025 compared to the previous year, with system-wide capacity improving by 10.8% [2] - Estimated fuel price per gallon in July 2025 was $2.58 [2] - Allegiant currently holds a Zacks Rank 5 (Strong Sell) [2] LATAM Airlines - LATAM Airlines reported a 10% year-over-year increase in consolidated capacity for July 2025, driven by a 12.2% increase in international operations and an 11.8% increase in domestic operations in Brazil [5] - Consolidated traffic increased by 10.4% year-over-year, with load factor growing by 0.4 percentage points to 86.7% [6] - LATAM transported almost 8 million passengers in July 2025, a 7.9% increase year-over-year, and has transported 49.5 million passengers year-to-date [7] Ryanair Holdings - Ryanair transported 20.7 million passengers in July 2025, reflecting a 3% year-over-year increase [8] - July traffic marked a continuous improvement over seven months, with July traffic exceeding previous months' figures [9] - Load factor remained flat at 96% year-over-year, showing consistent passenger demand [10] - Despite 680 flight cancellations due to French air traffic control strikes, Ryanair operated over 113,000 flights in July 2025, an increase from previous months [11]

Company Overview - LATAM Airlines is Latin America's leading airline, headquartered in Santiago, Chile [11] - The company filed for Chapter 11 bankruptcy on May 26, 2020, and successfully emerged from bankruptcy on November 3, 2022, as part of a financial restructuring aimed at reducing debt and adapting to challenges posed by the COVID-19 pandemic [11] - Upon emergence, LATAM had approximately $2.2 billion in liquidity and achieved a 35% reduction in debt, alongside a more resilient operational structure [11] Investment Ratings - LATAM is currently rated 1 (Strong Buy) on the Zacks Rank, with a VGM Score of A [12] - The company has a Value Style Score of A, supported by attractive valuation metrics, including a forward P/E ratio of 10.27 [12] - For fiscal 2025, two analysts have revised their earnings estimate upwards in the last 60 days, with the Zacks Consensus Estimate increasing by $0.56 to $4.68 per share [12] Performance Metrics - LATAM boasts an average earnings surprise of +4%, indicating a positive trend in earnings performance [12] - With a solid Zacks Rank and top-tier Value and VGM Style Scores, LATAM is recommended for investors' consideration [13]

Group 1: Suzano S.A. (SUZ) - Suzano S.A. is a eucalyptus pulp and paper products company with a Zacks Rank 1 [1] - The Zacks Consensus Estimate for its current year earnings has increased by 1.5% over the last 60 days [1] - The company has a PEG ratio of 0.10, significantly lower than the industry average of 0.50, and possesses a Growth Score of B [1] Group 2: LATAM Airlines Group S.A. (LTM) - LATAM Airlines Group S.A. is a passenger and cargo air transportation services company with a Zacks Rank 1 [2] - The Zacks Consensus Estimate for its current year earnings has increased by 13.6% over the last 60 days [2] - The company has a PEG ratio of 0.47, slightly lower than the industry average of 0.49, and possesses a Growth Score of A [2] Group 3: Montrose Environmental Group, Inc. (MEG) - Montrose Environmental Group, Inc. is an environmental services company with a Zacks Rank 1 [3] - The Zacks Consensus Estimate for its current year earnings has increased by 123.8% over the last 60 days [3] - The company has a PEG ratio of 1.17, significantly lower than the industry average of 5.07, and possesses a Growth Score of A [3]

Core Insights - LATAM Airlines, headquartered in Santiago, Chile, is Latin America's leading airline and has successfully emerged from Chapter 11 bankruptcy on November 3, 2022, after filing on May 26, 2020, as part of a financial restructuring to reduce debt and adapt to COVID-19 challenges [11] - The company emerged with approximately $2.2 billion in liquidity and a 35% reduction in debt, alongside a more resilient operational structure [11] - LATAM is currently rated 1 (Strong Buy) on the Zacks Rank, with a VGM Score of A, indicating strong potential for growth [12] - The Growth Style Score for LATAM is also A, forecasting year-over-year earnings growth of 44.9% for the current fiscal year [12] - Recent upward revisions in earnings estimates by analysts have increased the Zacks Consensus Estimate by $0.56 to $4.68 per share for fiscal 2025 [12] - LATAM has an average earnings surprise of +4%, further solidifying its position as a strong investment opportunity [12] - With a solid Zacks Rank and top-tier Growth and VGM Style Scores, LATAM should be considered a top pick for growth investors [13]