Bank of America Securities analyst Rogerio Araujo maintained a Buy rating on Copa Holdings (CPA – Research Report) yesterday and set a price target of $150.00.
Rogerio Araujo assigned a Buy rating to Copa Holdings based on various favorable factors. The strong third-quarter results exceeded Bank of America’s estimates, with EBIT and adjusted net profit increasing by 19% and 23%, respectively. Additionally, Copa’s capacity rose 12% YoY and, despite a higher jet fuel price, the EBIT margin came in at 23.6%. This is a significant increase from previous quarters. The company also managed to lower costs, with jet fuel prices coming in 6% below estimates, and sales and distribution costs dropping by 11%.
Furthermore, the company’s positive guidance for future growth contributed to the Buy rating. Management revised the EBIT margin guidance to 23% for 2023, up from the previous ~22%, even with higher jet fuel prices. Preliminary guidance for 2024 also indicates a strong year, with a potential 19% EBIT margin. Moreover, the company’s current valuation is attractive, trading at 4.6x Adjusted EV/EBITDA for 2023 and 5.2x for 2024, considerably below the historical level of 8.0x. These factors led Araujo to reiterate the Buy rating and increase the price objective to $150 from $130 per share.
In another report released yesterday, TD Cowen also maintained a Buy rating on the stock with a $135.00 price target.
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Copa Holdings (CPA) Company Description:
Copa Holdings SA engages in provision of air transportation. It involves in an airline operation which provides passenger and cargo services through the Copa Airlines and Copa Colombia principal operating subsidiaries. The company offers international flights to Costa Rica, Jamaica, Colombia and other cities. Copa Holdings was founded in 1947 and is headquartered in Panama.
Read More on CPA:
- Copa Holdings reports Q3 adjusted EPS $4.39, consensus $3.79
- Copa Holdings reports October traffic up 10.2% vs. October 2022
- Copa Holdings S.A. (CPA) Q3 Earnings Cheat Sheet
- Copa Holdings reports September traffic up 14.1% from last year
- Copa Holdings price target raised to $170 from $160 at JPMorgan
