LATAM Airlines (LTM) Soars 2.57% on Strong Earnings

LATAM Airlines (LTM) shares surged to a record high today, with an intraday gain of 2.57%.

The strategy of buying LTM shares after they reached a recent high and holding for 1 week yielded moderate returns over the past 5 years. The annualized return was 8.73% and outperformed the market by 8.73 percentage points. However, the overall performance was slightly below the market, with a 14.71% difference in annualized returns. This suggests that while the strategy provided some growth, it was not significantly outperforming the broader market. The market's annualized return during the same period was 28.45%, indicating that more aggressive strategies or longer holding periods might have yielded higher returns.

LATAM Airlines has demonstrated a notable resurgence in recent months, driven by its robust financial performance and strategic initiatives. The airline's first-quarter earnings for 2025 revealed a positive earnings per share (EPS) of US$0.001, compared to US$0 in the same period last year, indicating improved profitability. This positive financial performance has contributed to a year-to-date stock return of 37%, positioning LATAM Airlines as a strong performer within the transportation sector.

In addition to its financial improvements, LATAM Airlines has seen an increase in traffic in April 2025 compared to the previous year. This uptick in passenger numbers has further bolstered the airline's positive outlook. The company has also made significant investments in enhancing its customer service, including the introduction of Premium Business cabins on its aircraft. This US$360 million investment is aimed at attracting more business travelers and improving overall customer satisfaction.

Furthermore, Fitch Ratings has upgraded LATAM Airlines' rating to 'BB' with a positive outlook. This rating upgrade reflects the market's confidence in the airline's financial stability and future prospects. The combination of strong financial performance, strategic investments, improved traffic, and favorable ratings outlook has collectively contributed to the positive sentiment surrounding LATAM Airlines' stock price.