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-restructuring, 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 overall attractiveness based on value, growth, and momentum [12] Valuation Metrics - LATAM's Value Style Score is A, supported by attractive valuation metrics such as a forward P/E ratio of 9.26, making it appealing to value investors [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 has an average earnings surprise of +4%, indicating a positive trend in earnings performance [12] Conclusion - With a solid Zacks Rank and top-tier Value and VGM Style Scores, LATAM Airlines is recommended for investors' consideration [13]

Core Viewpoint - The article emphasizes the importance of value investing and highlights specific stocks, particularly Cathay Pacific Airways and LATAM Airlines Group, as strong value opportunities based on their financial metrics. Company Analysis - Cathay Pacific Airways (CPCAY) has a Zacks Rank of 2 (Buy) and a Value grade of A, with a current P/E ratio of 8.84 compared to the industry average of 11.51. Over the past year, CPCAY's Forward P/E has ranged from 5.56 to 9.84, with a median of 7.65 [4] - CPCAY's P/B ratio is 1.36, significantly lower than the industry average of 3.66. Its P/B has fluctuated between 0.81 and 1.51 over the past year, with a median of 1.16 [5] - LATAM Airlines Group (LTM) holds a Zacks Rank of 1 (Strong Buy) and a Value grade of A, with a Forward P/E ratio of 8.43 and a PEG ratio of 0.38, both favorable compared to the industry averages [6] - LTM's Forward P/E has varied from 6.73 to 9.37, with a median of 8.43. Its PEG ratio has ranged from 0.38 to 0.85, with a median of 0.59 [7] - LTM's P/B ratio is 14.37, which is higher than the industry average of 3.66. The P/B has been between 8.79 and 15.24 over the past year, with a median of 12.18 [7] Investment Opportunity - Both Cathay Pacific Airways and LATAM Airlines Group are identified as likely undervalued stocks, supported by their strong earnings outlook and favorable valuation metrics [8]

LATAM (LTM) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #1 (Strong Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system.S ...

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 Potential - LATAM Airlines holds a 2 (Buy) rating on the Zacks Rank, with a VGM Score of A, indicating strong investment potential [12] - The company is particularly appealing to growth investors, with a Growth Style Score of A, forecasting year-over-year earnings growth of 29.1% for the current fiscal year [12] - An analyst has revised their earnings estimate upwards for fiscal 2025, with the Zacks Consensus Estimate increasing by $0.05 to $4.17 per share [12] - LATAM has an average earnings surprise of +4%, further enhancing its attractiveness to investors [12] Conclusion - With a solid Zacks Rank and top-tier Growth and VGM Style Scores, LATAM Airlines is recommended for investors' consideration [13]

Core Insights - LATAM Airlines Group S.A. has achieved significant operational improvements, regaining operating margin and consolidating its leadership in the region [1] - In Q2 2025, the company reported an 8% increase in revenues and reached a record adjusted operating margin of 12.9% [1] - The company's leverage has been reduced, indicating improved financial stability [1]

Financial Data and Key Metrics Changes - LATAM Airlines Group reported total revenues of $3.3 billion, an increase of 8.2% year over year, driven by healthy demand in both passenger and cargo segments [21][7] - Adjusted EBITDA reached $850 million with a margin of 25.9%, reflecting a 5.5 percentage point improvement from the same period last year [7][22] - Net income for the quarter was $242 million, marking a 66% increase year over year, bringing first half net income to nearly $597 million [8][29] Business Line Data and Key Metrics Changes - Passenger revenues rose by 8.5%, while revenues from premium travelers increased by 12% year over year [21] - Cargo revenues grew by 10.2%, with notable performance during seasonal peaks [22] - Consolidated capacity measured in ASKs increased by 8.3%, with a 10.9% expansion in LATAM Airlines Brazil domestic operations [13][14] Market Data and Key Metrics Changes - LATAM transported over 20.5 million passengers, achieving a consolidated load factor of 83.5%, a 1.2 percentage point improvement year over year [4][15] - Domestic capacity across affiliates in Chile, Colombia, Ecuador, and Peru recorded a slight decline of 0.3% due to strategic reallocation of resources [14] - International passenger RASK remained nearly flat despite a 9.6% increase in capacity, indicating healthy demand dynamics [16] Company Strategy and Development Direction - LATAM Group is focused on strengthening its value proposition and enhancing customer experience through investments in product and technology [5][17] - The company is on track with its fleet plan, having incorporated 14 new aircraft in the first half of the year and expecting 12 more in the second half [10][30] - LATAM is analyzing opportunities for further growth, including potential acquisitions of additional aircraft to serve passenger and cargo traffic [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in current booking trends across domestic and international markets, reinforcing a positive outlook for the second half of the year [8][27] - The company has narrowed its full-year guidance, expecting adjusted operating margins between 14% and 15% and adjusted EBITDAR between $3.65 billion and $3.85 billion [28][27] - Management highlighted the strength of LATAM's diversified business model and its ability to adapt to shifting external conditions [8][7] Other Important Information - LATAM's liquidity at the end of the second quarter was $3.6 billion, equivalent to 27.2% of last twelve months revenues [25] - The company completed a refinancing of $800 million in senior secured notes, significantly reducing interest costs and generating annual savings of $33 million [26][30] - LATAM Group received multiple awards at the 2025 Skytrax World Airline Awards, reinforcing its position as the best airline in South America [6][20] Q&A Session Summary Question: Growth outlook and ASK growth - Management indicated solid demand across most markets and suggested a high single-digit growth prospect for 2026 based on the fleet plan [36][37] Question: Capital allocation and leverage - Management emphasized the importance of financial policy and performance in determining capital distribution to shareholders, with no immediate plans to increase dividends [41][42] Question: Cargo revenue performance - Management clarified that "other revenues" are minor and consist of various small income sources, with loyalty revenues included in passenger revenue [48][52] Question: Seasonal impact on profitability - Management acknowledged reduced seasonality impacts due to network diversification and growth in premium traffic revenue, which is less seasonal [56][58] Question: Capacity growth drivers - Management attributed capacity growth to timely aircraft deliveries, improved utilization, and the ability to adjust capacity across markets [67][70] Question: Cost efficiency opportunities - Management highlighted ongoing efforts to improve operational efficiency through technology and daily cost management practices [74][76]

Financial Data and Key Metrics Changes - LATAM Airlines Group reported total revenues of $3.3 billion, an increase of 8.2% year over year, driven by healthy demand in both passenger and cargo segments [20][6] - Adjusted EBITDA reached $850 million with a margin of 25.9%, reflecting a 5.5 percentage point improvement from the same period last year [6][22] - Net income for the quarter was $242 million, marking a 66% increase year over year, bringing first half net income to nearly $597 million [7][22] Business Line Data and Key Metrics Changes - Passenger revenues rose by 8.5%, while revenues from premium travelers increased by 12% year over year [20] - Cargo revenues grew by 10.2%, with notable performance during seasonal peaks [20][21] - Consolidated load factor reached 83.5%, a 1.2 percentage point improvement compared to the same period last year [13][6] Market Data and Key Metrics Changes - LATAM transported over 20.6 million passengers, a 7.6% year over year increase [13] - Domestic capacity across the group's affiliates in Chile, Colombia, Ecuador, and Peru recorded a slight decline of 0.3% due to strategic reallocation of resources [12] - International passenger revenue per available seat kilometer (RASK) remained stable despite a 9.6% increase in capacity, indicating healthy demand dynamics [15] Company Strategy and Development Direction - LATAM Group is focused on strengthening its value proposition and enhancing customer experience through investments in product and technology [5][16] - The company is on track with its fleet plan, having incorporated 14 new aircraft in the first half of the year and expecting to receive 12 more in the second half [32][8] - LATAM is analyzing opportunities for further growth, including potential acquisitions of additional aircraft to serve passenger and cargo markets [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand environment for the coming quarters, supported by solid booking trends across domestic and international markets [7][29] - The company has narrowed its full-year guidance, expecting adjusted EBITDAR between $3.65 billion and $3.85 billion, reflecting improved visibility for the year [30] - Management noted that the macroeconomic environment has become less uncertain, contributing to a positive outlook for the second half of the year [28][29] Other Important Information - LATAM Group maintained a strong capital structure with $3.6 billion in liquidity and an adjusted net leverage ratio of 1.6 times [26][27] - The company returned $445 million to shareholders through dividends and share repurchase programs during the quarter [25][31] - LATAM was recognized as the best airline in South America for the sixth consecutive year at the 2025 Skytrax World Airline Awards [5][19] Q&A Session Summary Question: Growth outlook and ASK growth - Management indicated solid demand in most markets and expects high single-digit growth prospects for 2026, supported by the fleet plan [36][39] Question: Capital allocation and leverage - Management stated that capital distribution decisions will be evaluated based on performance and liquidity, with no current barriers to propose further distributions [43][45] Question: Other revenue decline - Management clarified that "other revenues" amounted to $36 million, primarily from LatAm travel and other minor sources, which do not significantly impact overall results [50][52] Question: June quarter seasonality - Management acknowledged that while June has historically been challenging, the diversification of the network and growth in premium traffic revenue have mitigated seasonal impacts [56][61] Question: Guidance update and capacity growth - Management confirmed that capacity growth is supported by timely aircraft deliveries and strong demand, with a focus on balancing capacity across markets [66][72] Question: Cost efficiency opportunities - Management emphasized ongoing daily efforts to improve cost efficiency, particularly through technology and operational improvements [78][80]

Financial Performance - LATAM group recorded a net income of US$242 million in 2Q25, a 66.0% increase compared to 2Q24[6, 20] - Adjusted EBITDAR reached US$850 million in 2Q25, up 37.4% year-over-year, with a margin of 25.9%[6, 20] - The adjusted operating margin was a record 12.9% for the second quarter, a 3.9 percentage point increase compared to 2Q24[6, 20] - Revenues increased by 8.2% year-over-year, reaching US$3.279 billion in 2Q25[6, 20] - The company returned US$445 million to shareholders through dividends and share repurchases, representing 1.6% of outstanding shares[6, 40] Operational Highlights - LATAM transported over 20.5 million passengers in 2Q25[6] - Capacity grew by 8.3% year-over-year (ASK)[6] - Consolidated load factor reached 83.5%, a 1.2 percentage point increase compared to 2Q24[6, 8] Refinancing and Debt Management - LATAM successfully refinanced US$800 million of high-interest rate debt, reducing interest costs by over 570 basis points and unlocking annual savings of US$33 million[6, 32, 42] Customer Experience - Customer satisfaction (NPS) remained at a high of 56 points in 2Q25[6, 41] Fleet and Guidance - The company received 12 aircraft in 2Q25 (11 narrow-body + 1 wide-body)[6] - Updated 2025 full-year guidance reflects an improved outlook, with adjusted EBITDAR expected to be between US$3.65 billion and US$3.85 billion[6, 37]

Company Performance - LATAM (LTM) has returned approximately 50.3% since the beginning of the calendar year, significantly outperforming the Transportation sector, which has returned an average of -2.7% year-to-date [4] - The Zacks Consensus Estimate for LATAM's full-year earnings has increased by 28.8% over the past 90 days, indicating improved analyst sentiment and a more positive earnings outlook [3] Industry Context - LATAM is part of the Transportation - Airline industry, which consists of 25 individual companies and currently ranks 87 in the Zacks Industry Rank. The average gain for stocks in this group is 6.1% this year, highlighting LATAM's superior performance [5] - Another notable performer in the Transportation sector is Ryanair (RYAAY), which has returned 41.6% year-to-date and has a consensus EPS estimate that has increased by 9.2% over the past three months [4][5] Sector Ranking - The Transportation sector, which includes LATAM, is ranked 9 in the Zacks Sector Rank, which evaluates the strength of 16 individual sector groups based on the average Zacks Rank of the stocks within those groups [2]

Core Insights - LATAM Airlines Group reported a year-over-year increase in revenue passenger-kilometers (RPK) for June 2025, indicating growth in air traffic [1] Group 1: Capacity and Traffic - LATAM Airlines experienced a 10.7% year-over-year increase in consolidated capacity, measured in available seat-kilometers (ASK), driven by a 13.9% increase in domestic capacity in Brazil and a 12.3% increase in international capacity [2] - The consolidated traffic for LATAM Airlines increased by 10.2% year-over-year, although it did not outpace the capacity expansion, leading to a decrease in the consolidated load factor by 0.4 percentage points to 83.8% [4][11] - LATAM Airlines transported nearly 7 million passengers in June 2025, marking a 7.3% year-over-year increase, with a year-to-date total exceeding 41.5 million passengers [5][11] Group 2: Market Developments - New domestic routes were launched in Brazil from Aracaju to Congonhas and from Fortaleza to Juazeiro do Norte, along with an international connection between Bariloche in Argentina and Guarulhos in Brazil [3]