LATAM Airlines Group S.A. (LTM)
Valuation Overview•Is LATAM Airlines Group S.A. Overvalued or Undervalued?
Trading at a discount to intrinsic cash flow value, implying pessimistic long-term market expectations.
Moderate quality score of 60/100, reflecting stable operating margins and manageable leverage.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: Solid fundamental quality, though solvency presents a headwind.
Wall Street is highly bullish, projecting significant upside. This outlook is strongly supported by highly attractive capital returns, driven by a balanced mix of reliable dividends and share buybacks.
LTM demonstrates strong business quality with robust profitability and healthy margins (highlighted by a massive 26.6% ROIC). This is paired with a moderately leveraged but stable balance sheet.
The company is driving exceptional top-line expansion (15.1% 3Y CAGR) however, earnings have severely contracted over the same period. The company maintains healthy operational efficiency with a 17.4% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $4.1B | +11.2% | +15.1% | +29.5% | +3.9% | |
| EBITDA | $784.7M | — | +13.2% | — | — | |
| Net Income | $576.0M | +49.4% | +2.9% | — | — | |
| EPS (Diluted) | $2.00 | +56.3% | -43.1% | — | — | |
| Free Cash Flow | $588.1M | -11.8% | — | — | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 29.8% | 26.3% | 18.1% | 18.5% |
| Operating Margin | 17.4% | 12.5% | -3.9% | -10.5% |
| Net Margin | 11.2% | 7.6% | -11.6% | -16.8% |
| FCF Margin | 12.2% | 12.1% | 2.1% | 2.4% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $1.35 | $2.01 | +48.9% | ||
| Q1'26 | $1.35 | $1.69 | +25.2% | ||
| Q1'26 | $1.35 | $1.69 | +25.2% | ||
| Q4'25 | $1.26 | $1.30 | +3.2% | ||
| Q3'25 | $0.66 | $0.81 | +22.7% | ||
| Q2'25 | $0.61 | $1.18 | +93.4% | ||
| Q1'25 | $0.90 | $0.90 | +0.0% | ||
| Q4'24 | $0.51 | — | — |
Total return is +51.0% (1Y), outperforming the benchmark by +26.0%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +2.6% | -6.7% | — |
| 1Y | +51.0% | +26.0% | +4.0% |
| 3YCAGR | +33.7% | +13.1% | +12.7% |
| 5YCAGR | +19.0% | +6.0% | +12.7% |
| 10YCAGR | +33.8% | +20.2% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about LATAM Airlines Group S.A. (LTM) valuation, health, and returns.
LATAM Airlines Group S.A. is estimated to be undervalued under our discounted cash flow framework. relative multiples indicate the stock is Fair versus peers compared to industry peers. undervalued (implying +137.7% upside to DCF intrinsic value of $132.75)
LATAM Airlines Group S.A. has multiple valuation anchors: DCF Intrinsic Value: $132.75 | Peer Relative Fair Value: $58.88 | Wall Street Analyst Target: $71.15 (implying +27.4% upside). A convergence of these signals offers higher conviction.
LATAM Airlines Group S.A. displays good financial health with a composite quality score of 60/100, supported by a Altman Z-Score of 1.3 (distress zone), Piotroski F-Score of 7/9, Return on Invested Capital (ROIC) of 26.6%.
LATAM Airlines Group S.A. pays a 3.7% dividend yield, covered by a 41% payout ratio with 1 years of growth, supplemented by a 3.6% buyback yield.
LATAM Airlines Group S.A.'s current growth trajectory is Decelerating. The company achieved +11.2% 1Y revenue growth and +56.3% 1Y EPS growth, compared to its 3Y revenue CAGR of +15.1%.
Wall Street consensus is Hold based on 17 analysts, beating EPS expectations in 80% of recent quarters with a 6-quarter streak. The consensus price target represents a +27.4% change from current levels.
Investment risks for LATAM Airlines Group S.A. include: -33.9% 1-year max drawdown, high beta (1.71x market volatility), elevated distress risk. Volatility risk is characterized by a beta of 1.71x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.