According to JPMorgan, Copa’s stock could rise as air travel continues to recover and industry-wide headwinds ease. Analyst Guilherme Mendes upgraded the Latin American airline’s stock to overweight from neutral. Its price target of $132 represents an upside move of 50.2% from the stock’s close on Thursday. Mendes said Copa is attractive given its financials, particularly its debt-to-EBITDA ratio and liquidity. He also said that the stock currently has a discounted valuation, which could represent a good entry point for investors. “In our view, Copa has a relatively comfortable balance sheet position, with leverage expected to be just 1.8 times net debt to EBITDA by the end of 2023, the lowest among Latin American airlines,” Mendes said in a statement on Friday. “Also, immediate liquidity versus short-term debt is the best in the cluster.” The stock gained more than 1% in Friday trading. Despite the broader market slump, it managed a 0.6% gain in 2022. To be safe, Mendes noted that factors such as increased competition, a weaker-than-expected recovery in air travel, and renewed fuel price hikes could weigh on the stock’s performance. Within the broader aviation sector, the analyst cited capacity increases and a 30% fall in jet fuel prices since October as evidence of an improving environment. But he said he’s still “relatively cautious” compared to other industries given his exposure to fluctuating fuel costs and foreign exchange. Copa flies from US cities like New York, Miami, Los Angeles and San Francisco, as well as international destinations like Punta Cana, Lima and Panama. It was founded in 1947 as the National Airline of Panama. — CNBC’s Michael Bloom contributed to this report.
https://www.cnbc.com/2023/01/13/jpmorgan-upgrades-this-under-the-radar-latin-american-airline-says-it-can-rally-50percent.html JPMorgan is upgrading this under-the-radar Latin American airline and says it could gain 50%