LATAM Airlines' Earnings Will Remain 'Higher For Longer,' Says Bullish Analyst

LATAM Airlines Group SA LTM shares were declining in early trading on Tuesday.

The company has emerged from bankruptcy stronger and is now larger and leaner, according to Morgan Stanley.

Analyst Jens Spiess initiated coverage of LATAM Airlines Danaher with an Overweight rating and price target of $40.

Check out other analyst stock ratings.

The LATAM Airlines Thesis: The company's profitability has climbed above the pre-COVID-19 pandemic levels, while that of its U.S. legacy peers have not, and its stock valuation has not recovered, Spiess said in the initiation note.

LATAM Airlines' shares are down 55% since the pre-pandemic levels and "offer growth at an attractive price," the analyst stated. "LTM’s valuation implies that earnings are not sustainable, yet we think they will remain higher for longer," Spiess added.

"We see LTM’s exposure to under-penetrated markets supporting above average passenger growth over next five years (+5% RPK CAGR)," Spiess further wrote, while naming the company as a top pick.

LTM Price Action: Shares of LATAM Airlines had declined by 0.80% to $26.20 at the time of publication on Tuesday.

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