Copa ‘s stock could rally as air travel continues to rebound and industry-wide headwinds ease, based on JPMorgan. Analyst Guilherme Mendes upgraded the Latin American airline’s stock to obese from neutral. His price goal of $132 presents an upside of fifty.2% over where the stock closed Thursday. Mendes said Copa is attractive given its financials, specifically its debt-to-EBITDA ratio and liquidity. He also said the stock currently has a reduced valuation, which could make a great entry point for investors. “In our view Copa has a comparatively comfortable balance sheet situation, with leverage expected to finish 2023 at only one.8x net debt to EBITDA, the bottom amongst LatAm carriers,” Mendes said in a note Friday. “Also, immediate liquidity over short-term payables is the perfect among the many cluster.” The stock gained greater than 1% in Friday trading. It eked out a 0.6% advance in 2022 despite the broader market’s tumble. To ensure, Mendes noted aspects like increased competition, weaker air travel get well than expected and re-elevated fuel prices could impact the stock’s performance. Inside the broader air travel sector, the analyst pointed to capability increases and a 30% drop in jet fuel prices since October as evidence of an improving environment. But he said he remains to be “relatively cautious” in comparison with other industries given its exposure to fluctuating fuel costs and foreign exchange. Copa flies out of U.S. cities similar to Recent York, Miami, Los Angeles and San Francisco and international destinations like Punta Cana, Lima and Panama. It was founded because the National Airline of Panama in 1947. — CNBC’s Michael Bloom contributed to this report.
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