LATAM Airlines No Longer Underweight At Morgan Stanley

Morgan Stanley has upgraded LATAM Airlines Group SA (ADR)

to Equal Weight from Underweight to reflect expectations of further strides in rationalizing its business. "We project a 2016e EBIT margin for LATAM of 6.0% (closer to the high end than the low end of its guided range) and see moderate profitability gains for the company next year, helped by a better macro, a stronger BRL and the company's cost initiatives," analyst Josh Milberg wrote in a note. Milberg also increased his price target to $8.80 from $4.90, reflecting Qatar Airways capital injection and the expectations that the airline will deliver an additional $1.5 billion of fleet commitment/asset reductions beyond its earlier achievements. "However, with the stock trading at a 2017e EV/EBITDAR of 7x, we believe an Equal-weight is warranted for the stock," Milberg added. At the time of writing, ADRs of LATAM Airlines were up 0.87 percent to $8.07.