LTM Stock Surges 28.8% in 3 Months: Is the Rally Sustainable in 2026?

Core Insights - LATAM Airlines Group (LTM) shares have surged 28.8% over the past three months, outperforming the Zacks Transportation sector's 19.3% rise [1][9] Growth Strategy - LTM targets 8-10% passenger capacity growth for 2026 while maintaining operating margins of 15-17% [3][9] - The company emphasizes expansion in faster-growing international markets and selective domestic increases while controlling unit costs [3] Financial Performance - LTM aims to lift adjusted EBITDA to $4.2-4.6 billion and generate over $1.7 billion in levered free cash flow, keeping net leverage at or below 1.4x [4] - The company maintains ample liquidity above US$5 billion and continues to invest in technology and customer experience for long-term growth [4] Fleet Expansion - LATAM Airlines plans to expand its fleet from 363 aircraft at the end of 2025 to 371 in 2026, with a focus on narrow-body aircraft growth [5] - The narrow-body fleet is expected to increase from 284 to 291, 329, and 343 aircraft, driven by an increase in Airbus Neo aircraft [5] - Wide-body capacity will expand more selectively, while the cargo fleet remains stable at 20 aircraft [6] Earnings Estimates - The Zacks Consensus Estimate for Q4 2025, full-year 2025, and full-year 2026 has been revised upward by 3.05%, 4.23%, and 4.5% respectively over the past 60 days [10]