Chile Equity Strategy A Good Play on the End of Conflict – Upgrading to OW

Research evidence excerpt

Chile Equity Strategy A Good Play on the End of Conflict – Upgrading to OW

Diego Celedon AC Global Markets Strategy

(56-22) 425-5245 12 June 2026 J P M O R G A N

diego.celedon@jpmorgan.com

and it should act as an additional driver for equities.

We are upgrading Chilean equities to OW and adding LatAm Airlines (OW, Guilherme

Mendes) to our portfolio. Chile’s valuations became stretched after the strong performance

of 2025, and hence we entered this year with the market at slightly above 14x P/E.

Nonetheless, the mix of weak performance and strong earnings figures in 1Q26 imply that

the multiple has de-rated to 12x currenlty. In our view, this provides attractive room for re-

rating to return to the levels seen during the first weeks of 2026. In terms of our portfolio, as

flagged in the recent report from our Airlines Team, LatAm Airlines is the regional top pick

as it combines a strong operating outlook, the ability to pass through fare increases, and an

attractive valuation. Hence, it should be a good exposure to play the oil price normalization

ahead. In terms of exposure to the domestic cycle, we are keeping Santander Chile (OW; Yuri

Fernandes), which reported strong May results, with healthy NII, lower provisions, and lower

taxes driving a strong beat, and Falabella (OW, Nicolas Larrain), which also showed very

healthy 1Q26 numbers recently. Funding: To fund our OW on Chile we have removed from

our portfolio Mercado Libre, which our analyst Marcelo Santos downgraded following

greater competition and impact on margins from higher investments in Brazil e-commerce

with new take rate promotions as well as regionally with higher AI usage (link to the latest

views on Mercado Libre here).

Table 1: Latin America Model Portfolio by Country

Bloomberg JPM Price Last M.