While the crisis hit hard at the actions of Latin American airlines, there is one company that stands out for its greater ability to deal with the impacts of the pandemic, La Tercera reported.
Copa Airlines, is one of Goldman Sachs’ favorite airlines in the region, as the investment bank recommends buying shares of the Panamanian company.
According to Goldman’s analysts, it is the airline that presents the best relation between risk and return in view of its solid levels of debt and cash. But in addition to its favorable financial structure, Copa benefits from its more defensive business model compared to its peers in the region.
“Among the airlines under our coverage, we maintain a preference for Copa, being the company that presents the best risk/reward level due to its lower leverage ( 0.7x ratio as of 2019) and a solid cash position. Its hub-based model will probably adjust more easily to a lower demand scenario compared to airlines that operate mainly point-to-point flights,” explained Goldman Sachs.
The investment bank recommends buying Copa shares and set a target price of US$66 over 12 months. The Panamanian airline accumulates a 51% drop on Wall Street and trades at a price of US$52.6.
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