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The aviation market has shown resilience over the years and is expected to grow significantly due to the increasing demand for air travel and the introduction of new innovative ideas to strengthen the market. Against this backdrop, we have evaluated the outlook for Copa Holdings SA (CPA), Corporación America Airports SA (CAAP), and Cathay Pacific Airways (CPCAY) airline stocks, and consider them to be the best in the sector at the moment. Let’s evaluate investment opportunities. read….
The outlook for the aviation industry is bright as technology advances and more people and cargo take to the skies. Investors may consider buying airline stocks given industry tailwinds (Corporación America Airports SA)CAAP) and Cathay Pacific Airways Ltd. (CPCAY), it is well positioned for potential gains, but it would be wise to keep an eye on Copa Holdings SA (certified public accountant) now.
According to the International Air Transport Association (IATA), Global passenger demand Total capacity measured in Revenue Passenger Kilometers (RPK) increased by 21.5% year-on-year in February 2024, and total capacity measured in Available Seat Kilometers (ASK) increased by 18.7% year-on-year.
of Total air cargo demandFreight traffic, measured in cargo tonne kilometers (CTK), increased by 11.9% compared to February 2023 levels, marking the third consecutive month of double-digit year-on-year demand growth.
The aviation industry is expected to show tremendous growth this year, with further growth expected in 2025. IATA expects total revenue to increase 7.6% year over year. $964 billion in 2024.
The industry is coming up with the following new innovative technologyWith the help of artificial intelligence (AI) algorithms, use global weather data, historical flight data, and more to avoid flight delays and cancellations, improve customer experience and employee efficiency, and reduce costs. I will use it to help you.
US aviation market is estimated to grow rapidly CAGR 4.5%reaching $105 billion by 2030.
With these encouraging trends in mind, let’s look at three fundamentals. Airlines Start with the weakest stocks from an investment perspective.
Stock #3: Copa Holdings, SA (certified public accountant)
Headquartered in Panama City, Panama, CPA provides air passenger and cargo services.[Business description]The company operates its business through the air transportation division. The airline operates approximately 327 scheduled daily flights from its hub in Panama City to 78 destinations in 32 countries in North, Central and South America and the Caribbean.
On April 11, the CPA released statistics for March 2024, showing that CPA capacity (ASM) increased by 12.3% and system-wide passenger traffic (RPM) also increased by 11.5% year-on-year.
On March 15, CPA paid shareholders a first quarter dividend of $1.61 per share. The annual dividend rate is $6.44 per share, which gives him a dividend yield of 6.69% at the current stock price. The four-year average yield is 1.32%. Over the past five years, CPA dividends have grown at a CAGR of 8.5%.
CPA’s trailing 12-month EBITDA and leveraged FCF margins were 32.29% and 21.53%, which are 135.8% and 225.7% higher than the industry average of 13.69% and 6.61%, respectively.However, the stock asset turnover rate 0.70x is 11.4% lower than the industry average of 0.79x.
Over the past three and five years, revenue has grown at a CAGR of 62.9% and 5.3%, respectively, and total assets have grown at a CAGR of 10.5% and 3.2% over the same period.
During the fiscal fourth quarter ended December 31, 2023, CPA’s total operating revenue and total operating expenses were $916.93 million and $698.06 million, respectively, an increase of 3% and 4% year over year. Ta.
The company’s adjusted net income for the quarter increased 6% year-over-year, but its adjusted basic earnings per share decreased slightly from the year-ago period to $4.47.
Street expects CPA’s sales to increase 7.6% from a year ago to $3.72 billion in the fiscal year ending December 2024. The company’s EPS for the same period is expected to be $16.52, down 1.6% year-over-year. The company has surpassed consensus EPS estimates in each of his trailing four quarters, which is great.
The stock price fell 14.8% over the past nine months, but rose 14.2% over the past six months, closing at $96.25.
CPA’s mixed fundamentals are reflected in its content. power rating. The stock has an overall rating of C, which equates to Neutral according to our proprietary rating system. POWR ratings are calculated by considering 118 different factors, with each factor weighted to the best degree.
The stock earns a C grade for growth, value, momentum, and stability.within Airlines Ranked 10th out of 26 stocks in the industry.
To see additional POWR ratings for CPA sentiment and quality, visit click here.
Stock #2: Corporación America Airports SA (CAAP)
Headquartered in Luxembourg City, Luxembourg, CAAP acquires, develops and operates airport concessions. It operates 52 airports in Latin America, Europe and Eurasia.
On March 19, CAAP reported that passenger traffic in February 2024 increased by 5.4% year-on-year, reaching 92.80% of the February 2019 level. Additionally, it reported that international passenger numbers were 4.2% above pre-pandemic levels.
CAAP had operating cash of $356.42 million in the trailing twelve months, which was 18.4% higher than the industry average of $300.97 million. Trailing 12-month EBITDA and leveraged FCF margins were 40.33% and 16.67%, which were 194.6% and 152.3% higher than the industry averages of 13.69% and 6.61%, respectively.
Over the past three and five years, the company’s EBITDA has grown at a CAGR of 123.8% and 3.4%, respectively, and its net income has grown at a CAGR of 102% over the past five years.
CAAP’s revenue for the fourth quarter of its fiscal year ended December 31, 2023 was $365.04 million, and gross profit was $115.38 million, an increase of 6.4% from the prior year period. Additionally, adjusted EBITDA was 303.4 million, an increase of 146.6% year-on-year.
Net income and EPS attributable to owners of the parent for the quarter were $130.75 million and $0.81, an increase of 977.2% and 976.7%, respectively, from the same period last year.
Street expects CAAP’s sales to increase 13.5% year-on-year to $1.59 billion in the fiscal year ending December 2024. EPS for the period is expected to be $1.18. The company beat consensus EPS estimates in three of the trailing four quarters.
Shares have increased 59.6% over the past year, closing at $16.45. It has risen 36% in the past six months.
CAAP’s POWR Rating reflects this promising outlook. The overall rating is B, which is equivalent to a “buy” according to our own rating system.
CAAP has an A grade for sentiment and a B grade for momentum and quality. Ranked 2nd in the industry.
For other CAAP evaluations (growth, value, stability): click here.
Stock #1: Cathay Pacific Airways Ltd. (CPCAY)
Headquartered on Lantau Island, Hong Kong, CPCAY provides international passenger and air cargo transportation services. The company operates through its four business segments: Cathay Pacific Airways and Cathay Dragon Airways. Hong Kong Airlines. Hong Kong Express. and aviation services.
On March 21, CPCAY’s February 2024 statistics showed strong travel demand throughout the month, especially during the Lunar New Year holiday period. On February 18, CPCAY achieved a significant milestone by carrying over 70,000 passengers and operating 272 passenger flight sectors, the highest number per day since the start of the pandemic. CPCAY said that in February 2024 he carried 1,801,174 passengers, an increase of 61.6% over the previous year.
On March 13, CPCAY announced that its interim dividend for the year ending December 31, 2023 will be HK$0.43 per share, to be paid to shareholders on May 2. The annual dividend rate is $0.55 per share, resulting in a dividend yield of $10.72. % of current stock price. The four-year average yield is 0.28%. Over the past five years, CPCAY’s dividend has grown at a CAGR of 23.5%.
CPCAY’s trailing twelve month operating cash of $3.38 billion is significantly higher than the industry average of $300.97 million. Trailing 12-month EBITDA and leveraged FCF margins were 21.66% and 20.86%, which were 58.2% and 215.6% higher than the industry averages of 13.69% and 6.61%, respectively.
Revenue has grown at a CAGR of 26.3% over the past three years, and net income has grown at a CAGR of 33.1% over the past five years.
CPCAY’s total revenue and operating income for the year ended December 31, 2023 were $12.11 billion and $1.94 billion, an increase of 85.1% and 335.7%, respectively, from the prior year.
CPCAY’s underlying earnings attributable to stockholders and earnings per common share for the year were $982 million, $16.10. By comparison, CPCAY’s underlying loss attributable to shareholders and loss per common share for the prior year was $849 million, 14.40 cents. , Each.
Street expects CPCAY’s sales for the fiscal year ending December 2024 to increase 18.6% year over year to $14.32 billion.
Shares have increased 5.5% over the past six months, closing at $5.13. It has increased by 4.2% over the past year.
CPCAY’s solid outlook is reflected in its POWR rating. This stock has an overall rating of ‘A’, which is equivalent to a ‘strong buy’ in our proprietary rating system.
CPCAY has an A grade for quality and a B grade for growth, value, and stability. It is ranked number 1 in the industry.
click here Click here for additional POWR ratings for CPCAY (Momentum and Sentiment).
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CPCAY stock was unchanged in premarket trading Tuesday. Year-to-date, CPCAY has gained 3.47%, while the benchmark S&P 500 index has gained 6.46% during the same period.
About the author: Neha Panjwani
Neha has had a deep interest in finance since her school days, and this passion led her to a career as an investment analyst after completing a Bachelor of Commerce. Neha is currently enrolled in the CFA program and is dedicated to further deepening her understanding of the fundamentals of investing. Her Neha’s main objective is to help individual investors identify the best investment opportunities by passionately evaluating key aspects of financial products, primarily focusing on stocks and her ETFs. is. Her focus is on empowering individuals to make informed and strategic investment decisions in a dynamic financial world.
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