Nothing has really gone easy for the airline industry in this pandemic, including a recent resurgence in COVID-19 cases that has led many governments to reinstitute strict (or at least stricter) travel restrictions. That's not going to make life any easier for Copa Holdings (CPA), as it tries to balance capacity, costs, and cash burn across its Latin American footprint, but it doesn't also change my long-term view all that much.
Copa shares have appreciated almost 80% since my last update, but I still think there's more left in these shares as travel demand recovers, Copa simplifies its fleet, and continues to leverage long-term growth through its very valuable Panama-centered hub-and-spoke system. With long-term adjusted revenue growth (adjusted to a pre-pandemic starting point) of 4% and low-double-digit FCF margins (actually a contraction from the trailing decade), I still see double-digit annualized total return potential today.
Read more here:
Copa Still Has More Upside To Offer Even On A Slower Recovery Path
No comments:
Post a Comment