Latin America Transportation: Stock Ranking: Airlines Unchallenged at the Top; Weighing on Interest Rate Exposure

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Latin America Transportation: Stock Ranking: Airlines Unchallenged at the Top; Weighing on Interest Rate Exposure

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01 Jul 2026 18:00:00 ET │ 28 pages

Latin America Transportation

Stock Ranking: Airlines Unchallenged at the Top; Weighing on Interest

Rate Exposure

Filipe Nielsen AC

CITI'S TAKE +55-11-4009-5213

Airlines in Latin America remain unchallenged at the podium of our filipe.nielsen@citi.com

preferences. After showing resilience to fuel price spikes, we believe stock

prices have not fully reflected the upside potential from lower fuel, which

could reignite the discussion around profitable growth. On the Brazil side of

our coverage, market reaction in the past three months seemed mostly

driven by interest rate moves. Given the deterioration in expectations, we

performed a sensitivity analysis that shows that exposure depends not only

on leverage but also on FCF potential (and debt profile, in the case of toll

roads). Combining recent valuation trends and the risk from higher interest

rates, we bring toll roads slightly up in our preferences while highly exposed

names like Movida lose a few positions. The full table of preferences is

shown in Figure 1. More valuation charts and comps are in the note.

Ranking changes — Our top-ranked names have not changed, with Copa as our top

pick followed by LATAM, Aeromexico, and Localiza. Ecorodovias gained one position

(now 5th) for its cheap valuation in our view, while Motiva gained two positions (now

6th) after we recently upgraded it to Buy. Among them we still prefer Ecorodovias

from a relative valuation perspective, which trades at an IRR spread of 8–9pp to

sovereign rates while Motiva trades at 2.5–3pp spread (Figure 11). As a result, Movida