LATAM Airlines Group S.A. (LTM) Down 4.6% — Is It Time to Retreat and Regroup?
LATAM Airlines Group S.A. (LTM) is ceding ground in today's session, last trading at $47.62 on the NYSE. That is a $3.44 decline from the prior close of $51.06 and extends a slide that has steadily eroded the stock's gains from earlier in the year. LTM now trades roughly 32.4% below its 52-week high of $70.42, set on February 3, 2026. The retreat since then reflects how quickly investor confidence in the airline's earnings trajectory has cooled.
Volume so far stands at approximately 717,268 shares, slightly below the 90-day average of roughly 768,405. The decline is coming on ordinary turnover rather than a rush for the exits.
Why LATAM Airlines Group S.A. Price is Moving Lower
Fuel is the immediate pressure point. Brent crude rose more than 2% in Thursday morning trading to about $99.81 a barrel after reports that China's PetroChina canceled planned October gasoline and jet-fuel shipments to protect domestic supplies. That raised fresh concern about fuel availability and costs for airlines. LATAM is especially sensitive to that risk. In the second quarter, its fuel expense rose 93.1% year over year to $1.71 billion, and adjusted operating margin fell to 5.4% from 12.9%. The selling has been concentrated in LTM rather than spread across the group. Delta Air Lines, Inc. (DAL) is essentially flat at -0.08%, and FedEx Corporation (FDX) is up 0.67%, which points to the market singling out the carrier whose margins have already absorbed the heaviest fuel hit.
Thursday's oil spike landed on a stock already facing downward estimate revisions. On September 23, Zacks reported that analysts had cut LATAM's third- and fourth-quarter 2026 earnings estimates, along with full-year 2026 and 2027 projections. The cuts cited higher fuel costs, currency exposure and softer seat-fill rates. The company's own traffic data supports the seat-fill concern. August traffic grew 4.7% while capacity expanded a faster 7.0%, pulling load factor down 1.8 percentage points to 83.5%. When capacity outpaces demand and fuel costs climb at the same time, the squeeze on unit profitability compounds.
The headline results have held up better than the cost picture. LATAM's August 4 report showed EPS of $0.44 against a $0.41 estimate, and revenue of $4.12 billion topped the $4.06 billion consensus on 27% year-over-year growth. Net income nonetheless fell to $125.2 million from $241.6 million a year earlier as fuel costs nearly doubled. Management raised its 2026 adjusted EBITDA outlook to $4.1 billion to $4.4 billion from $3.8 billion to $4.2 billion. That raise is a meaningful counterweight, but it was issued before crude pushed toward $100. With oil now near that level, investors are questioning how much cushion remains in the guidance.
What is the LATAM Airlines Group S.A. Rating - Should I Sell?
Weiss Ratings assigns LTM a C- rating. Current recommendation is Hold. The C- sits at the lower edge of the Hold range. It reflects a business with genuine operating strength whose share performance and cost exposure have kept investors on edge, and it falls short of a sell signal.
The fundamental dimensions remain LATAM's strongest case. The Excellent rating on the Growth Index is supported by 27.15% revenue growth, a pace that shows demand across the airline's South American network expanding well ahead of typical mature-carrier growth. The Excellent rating on the Efficiency Index is backed by a 107.99% ROE. That figure is amplified by a thin post-restructuring equity base, but it still shows a carrier extracting substantial returns from its capital. A 9.85% profit margin is respectable for an airline. It is also the figure most exposed to the fuel inflation that cut second-quarter net income nearly in half. The Good rating on the Solvency Index suggests the balance sheet can absorb a period of elevated costs, though it stops short of the cushion an Excellent rating would imply for a business this sensitive to oil and currency swings.
Where the picture becomes more cautious is the market-facing side. LATAM is rated Weak on both the Total Return Index and the Volatility Index. A stock sitting more than 32% below its February high has not rewarded recent holders. Thursday's decline also shows how sharply the shares react to a single day of crude strength, and that is why the Volatility Index is not rated higher. These two ratings capture the risk investors are actually living with, and they are the main reason the overall rating sits at C- despite the fundamental strengths.
Within the Industrials sector, LATAM sits alongside United Parcel Service, Inc. (UPS, C-). It trails Delta Air Lines, Inc. (DAL, C+) and FedEx Corporation (FDX, C+), both of which carry somewhat better risk/reward profiles in Weiss's framework. Uber Technologies, Inc. (UBER, C) and Old Dominion Freight Line, Inc. (ODFL, C) also rank modestly ahead. Delta's higher rating stands out because it is the closest operating comparison and LATAM's joint-venture partner.
About LATAM Airlines Group S.A.
LATAM Airlines Group S.A. (LTM) is an Industrials company and the largest airline group in Latin America. Headquartered in Santiago, Chile, LATAM operates domestic passenger networks in Chile, Peru, Brazil, Colombia and Ecuador through affiliated carriers. It also flies an extensive regional and long-haul international network connecting South America with North America, Europe and Oceania. Its major hubs include Santiago, Lima, São Paulo and Bogotá, which give it a footprint across the continent that few competitors can match.
Beyond passenger service, LATAM runs a sizable freight operation through LATAM Cargo. That business uses dedicated Boeing 767 freighters alongside belly capacity on passenger aircraft, and it adds a revenue stream that can partly offset swings in passenger demand. The group's fleet is built around the Airbus A320 family for short- and medium-haul routes and Boeing 787 Dreamliners for long-haul flying. Its LATAM Pass loyalty program, one of the largest frequent-flyer programs in the region, supports customer retention and generates partner revenue.
LATAM's competitive position rests on network scale, multi-country domestic operations and its trans-American joint venture with Delta Air Lines. The partnership links the two carriers' networks across North and South America and gives LATAM access to a much broader customer base. The company emerged from a court-supervised restructuring with a leaner cost structure. Even so, its exposure to jet fuel prices and to fluctuations in regional currencies such as the Brazilian real and Chilean peso remains a structural feature of the business.
Investor Outlook
LATAM Airlines Group S.A. (LTM) carries a Weiss Rating of C- (Hold). Strong revenue growth and a raised EBITDA outlook offset a fuel-cost backdrop that has already compressed margins and is now drawing analyst estimate cuts. Investors should watch whether Brent holds near $100, whether load factors recover from August's 83.5%, and whether the $4.1 billion to $4.4 billion EBITDA guidance survives the next quarterly report. See full rankings of all C- rated Industrials stocks inside the Weiss Stock Screener.
--