JPMorgan Starts Grupo Aeromexico SAB De CV (AERO) at Overweight

JPMorgan analyst Guilherme Mendes initiates coverage on Grupo Aeromexico SAB De CV (NYSE: AERO) with a Overweight rating and a price target of $28.50.

The analyst comments: " Our thesis is based on: (i) what we view as an attractive valuation at 3.8x EV/EBITDAR 2026e compared to LTM and CPA at 4.6x on average, while we believe the sector could benefit from a potential re-rating. The current price implies a 49% upside potential to our PT and trades in line with the IPO price; (ii) Aeromexico’s unique position as Mexico’s only full-service carrier, leveraging its Mexico City hub and a higher contribution from premium revenues relative to peers; (iii) a decent free cash flow yield of 6% annually for the next two years, supporting an unlevered balance sheet with net debt/EBITDAR expected at 1.8x by 2026; and (iv) positive asymmetry for 2026, as Aeromexico is currently operating below optimal fleet utilization and stands to benefit from higher occupancy rates. Despite our OW rating, we maintain a relative preference for LATAM Airlines (LTM, OW) and Copa Holdings (CPA, OW) within our coverage due to their stronger earnings momentum and superior capital distribution."

For an analyst ratings summary and ratings history on Grupo Aeromexico SAB De CV click here. For more ratings news on Grupo Aeromexico SAB De CV click here.

Shares of Grupo Aeromexico SAB De CV closed at $19.15 yesterday.

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