Disclaimer, these ideas are for my records of what I see in the market after taking a trade. It will help me document the reason of why I took the trade so I can have a track record. And as such, this is not a financial advice.
I've been checking this stock since last year 2023. During the year, the company was in a strong bearish trend until it made a change of character (CHoCH).
In which, bottom monthly demand zone was already mitigated, leaving only an unmitigated demand zone that price will most likely reach again to mitigate.
Changing to the daily timeframe, it is possible to adjust the demand zones to gain more accuracy of the mitigated zones. Additionally, it is possible to see that the stock is building liquidity to be taken just above the unmitigated demand zone.
Additionally, the company's Q1 2024 report shows that the company is recuperating from the 2022 bankruptcy, and now they are growing and expanded two more airplanes to cover the flight demand, see summary done with ChatGPT 4.0 at the end. The Q1 2024 summary can be downloaded from the company's site.
Taking in consideration that the all time high of the company was around $32.68, and taking in consideration of the Q1 results, plus the price action analysis, I'll be investing in the company at the highlighted demand area and hold the stock to until we reach $32.68 again. This will be a long-term investment on my end and given the potential rewards, I feel that this is to be taken in consideration.
=== START OF SUMMARY FOR THE Q1 2024 RESULTS ===
- Profit:
- Operating Income: They made $441 million from their operations, a big increase of 56.8% from last year.
- Net Income: Their total profit was $259 million, which is up 84.1% from last year.
- EBITDA: Earnings before interest, taxes, depreciation, and amortization were $774 million, up 38.8% from last year.
Highlights
- Passengers:
- They flew 20.2 million passengers, which is 19.4% more than last year.
- International Flights: Passenger numbers increased by 32.5%.
- Domestic Flights in Chile, Colombia, Ecuador, Peru: Passenger numbers increased by 26.0%.
- Domestic Flights in Brazil: Passenger numbers increased by 9.1%.
- Capacity Growth: They increased their overall flight capacity by 17.5%.
- International Flights: Capacity increased by 25.2%.
- Domestic Flights in Chile, Colombia, Ecuador, Peru: Capacity increased by 21.9%.
- Domestic Flights in Brazil: Capacity increased by 4.7%.
- Profit Margin: They had an operating profit margin of 13.9%.
- Cash Generation: They generated $137 million in cash, ending the quarter with $3.0 billion in total available cash.
Financial Position
- Total Assets: They own assets worth $14.9 billion.
- Total Debts: They owe $14.3 billion.
- Total Equity: The remaining value after debts is $588 million.
- Debt Details:
- Their total debt is $7.1 billion.
- After accounting for their cash, their net debt is $5.2 billion.
- Leverage: Their leverage ratio, which measures debt relative to earnings, is 1.9x.
Operational Achievements
- Fleet Expansion: They added 1 Boeing 787-9 and 2 Airbus A321Neo planes, bringing their total fleet to 336 aircraft.
- Fuel Hedging: They have hedged (protected against price changes) 32% of their estimated fuel consumption for the second quarter of 2024.
Future Expectations for 2024
- Revenue: They expect to earn between $12.8 and $13.1 billion this year.
- Earnings: They expect their adjusted earnings (EBITDAR) to be between $2.75 and $3.05 billion, higher than their previous estimate.
- Capacity Growth:
- Overall, they plan to increase flight capacity by 14% to 16%.
- For domestic flights in Brazil, growth will be 8% to 10%.
- For domestic flights in Spanish-speaking countries, growth will be 14% to 16%.
- For international flights, growth will be 18% to 20%.
Additional Information
- Credit Rating Upgrades: Credit rating agencies have upgraded their ratings due to improved financial health.
- Dividends: They will pay out $175 million in dividends to shareholders, which is 30% of their net income from last year.
- New York Stock Exchange: They are planning to relist their shares on the NYSE.
Management Commentary
- The first quarter was very strong, setting new records thanks to high demand and cost-saving measures.
- They continue to expand their network and maintain a strong market position.
- They are focusing on using digital tools and artificial intelligence to improve customer service and operational efficiency.
I've been checking this stock since last year 2023. During the year, the company was in a strong bearish trend until it made a change of character (CHoCH).
In which, bottom monthly demand zone was already mitigated, leaving only an unmitigated demand zone that price will most likely reach again to mitigate.
Changing to the daily timeframe, it is possible to adjust the demand zones to gain more accuracy of the mitigated zones. Additionally, it is possible to see that the stock is building liquidity to be taken just above the unmitigated demand zone.
Additionally, the company's Q1 2024 report shows that the company is recuperating from the 2022 bankruptcy, and now they are growing and expanded two more airplanes to cover the flight demand, see summary done with ChatGPT 4.0 at the end. The Q1 2024 summary can be downloaded from the company's site.
Taking in consideration that the all time high of the company was around $32.68, and taking in consideration of the Q1 results, plus the price action analysis, I'll be investing in the company at the highlighted demand area and hold the stock to until we reach $32.68 again. This will be a long-term investment on my end and given the potential rewards, I feel that this is to be taken in consideration.
=== START OF SUMMARY FOR THE Q1 2024 RESULTS ===
- Profit:
- Operating Income: They made $441 million from their operations, a big increase of 56.8% from last year.
- Net Income: Their total profit was $259 million, which is up 84.1% from last year.
- EBITDA: Earnings before interest, taxes, depreciation, and amortization were $774 million, up 38.8% from last year.
Highlights
- Passengers:
- They flew 20.2 million passengers, which is 19.4% more than last year.
- International Flights: Passenger numbers increased by 32.5%.
- Domestic Flights in Chile, Colombia, Ecuador, Peru: Passenger numbers increased by 26.0%.
- Domestic Flights in Brazil: Passenger numbers increased by 9.1%.
- Capacity Growth: They increased their overall flight capacity by 17.5%.
- International Flights: Capacity increased by 25.2%.
- Domestic Flights in Chile, Colombia, Ecuador, Peru: Capacity increased by 21.9%.
- Domestic Flights in Brazil: Capacity increased by 4.7%.
- Profit Margin: They had an operating profit margin of 13.9%.
- Cash Generation: They generated $137 million in cash, ending the quarter with $3.0 billion in total available cash.
Financial Position
- Total Assets: They own assets worth $14.9 billion.
- Total Debts: They owe $14.3 billion.
- Total Equity: The remaining value after debts is $588 million.
- Debt Details:
- Their total debt is $7.1 billion.
- After accounting for their cash, their net debt is $5.2 billion.
- Leverage: Their leverage ratio, which measures debt relative to earnings, is 1.9x.
Operational Achievements
- Fleet Expansion: They added 1 Boeing 787-9 and 2 Airbus A321Neo planes, bringing their total fleet to 336 aircraft.
- Fuel Hedging: They have hedged (protected against price changes) 32% of their estimated fuel consumption for the second quarter of 2024.
Future Expectations for 2024
- Revenue: They expect to earn between $12.8 and $13.1 billion this year.
- Earnings: They expect their adjusted earnings (EBITDAR) to be between $2.75 and $3.05 billion, higher than their previous estimate.
- Capacity Growth:
- Overall, they plan to increase flight capacity by 14% to 16%.
- For domestic flights in Brazil, growth will be 8% to 10%.
- For domestic flights in Spanish-speaking countries, growth will be 14% to 16%.
- For international flights, growth will be 18% to 20%.
Additional Information
- Credit Rating Upgrades: Credit rating agencies have upgraded their ratings due to improved financial health.
- Dividends: They will pay out $175 million in dividends to shareholders, which is 30% of their net income from last year.
- New York Stock Exchange: They are planning to relist their shares on the NYSE.
Management Commentary
- The first quarter was very strong, setting new records thanks to high demand and cost-saving measures.
- They continue to expand their network and maintain a strong market position.
- They are focusing on using digital tools and artificial intelligence to improve customer service and operational efficiency.