Analysts Are Updating Their LATAM Airlines Group S.A. (SNSE:LTM) Estimates After Its Second-Quarter Results
Investors in LATAM Airlines Group S.A. (SNSE:LTM) had a good week, as its shares rose 6.5% to close at CL$26.35 following the release of its quarterly results. It was a workmanlike result, with revenues of US$4.2b coming in 3.3% ahead of expectations, and statutory earnings per share of US$0.0002, in line with analyst appraisals. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the consensus forecast from LATAM Airlines Group's eleven analysts is for revenues of US$17.3b in 2026. This reflects a notable 8.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to sink 14% to US$0.0024 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$17.2b and earnings per share (EPS) of US$0.0023 in 2026. So the consensus seems to have become somewhat more optimistic on LATAM Airlines Group's earnings potential following these results.
View our latest analysis for LATAM Airlines Group
There's been no major changes to the consensus price target of CL$31.33, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on LATAM Airlines Group, with the most bullish analyst valuing it at CL$32.89 and the most bearish at CL$29.24 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the LATAM Airlines Group's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of LATAM Airlines Group'shistorical trends, as the 18% annualised revenue growth to the end of 2026 is roughly in line with the 22% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 6.3% per year. So it's pretty clear that LATAM Airlines Group is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards LATAM Airlines Group following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at CL$31.33, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on LATAM Airlines Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for LATAM Airlines Group going out to 2028, and you can see them free on our platform here..
We don't want to rain on the parade too much, but we did also find 3 warning signs for LATAM Airlines Group (1 is a bit concerning!) that you need to be mindful of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.