Copa Shares Snap Back As The Street Is Reminded Of The Strong Cost Story

Copa’s (CPA) low $70’s share price around Christmas of 2018 will probably go down in my annals of “shouda, couda, wouda”, and maybe ought to serve as a reminder to use a more compelling alert/reminder system. Anyway, while this Latin American airline’s shares had been drifting since February, the shares rebounded strongly after first quarter earnings, as management once again demonstrated its proven (but still occasionally overlooked) cost management ability and maintained a fairly benign outlook for the business, as well as reiterating some encouragement about the Brazilian market later this year.

I still believe Copa is undervalued and buyable here. There are risks that Brazil won’t recover as quickly or as strongly as hoped, and that’s likewise true for Argentina, but I believe the company has been operating well even with things as they are. With a very strong network and operating plan in place, I believe mid-single-digit revenue growth can drive high single-digit EBITDAR growth and support a fair value around $100.

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Copa Shares Snap Back As The Street Is Reminded Of The Strong Cost Story