Copa Holdings Downward Guidance Revision Comes From Weaker Performance In Brazil,

In a report published Thursday, analysts at JP Morgan downgraded

from Overweight to Neutral. The price target was lowered from $130 to $110. Despite posting strong 1Q results, the company lowered its guidance for 2015. After having increased its guidance for the year only a few months ago, Copa revised its 2015 guidance down due to increased uncertainty and volatility in the airline industry in the Latin American geography served by the company. The revision in the guidance was also due to weaker than anticipated performance in Brazil, which in turn led Copa to "further reduce capacity growth in the region," the analysts said. This underperformance has led the company to reduce its EBIT margin guidance, after having increased it earlier in the year. The analysts believe that this downward revision is indicative of "deterioration in the markets in which the company operates." Copa has also reduced its guidance for RASM and load factors, while expecting marginally better ex-fuel CASM. JP Morgan has accordingly revised its estimates for the company. "CPA maintains industry-leading profitability in the region. Despite our lower operational estimates, CPA continues to deliver the highest margins in the region. Additionally, balance sheet remains healthy," the analysts said.