UPDATE: Bank of America Downgrades LAN Airlines; Lowers PO

According to a research report published this morning, Bank of America has downgraded LAN Airlines LFL from Buy to Neutral, and lowered PO from $31 to $30. Bank of America said in the report, "We continue to view LAN as a premium carrier in Latin America, but four factors lead us to downgrade the stock: (1) the integration process with TAM will likely bring substantial earnings volatility (Aires' integration might be a good proxy); (2) weak earnings momentum ahead of higher labor and fuel costs, among others, and tougher market conditions; (3) increased competition in the cargo segment; and (4) the stock has outperformed the XAL Index and the MSCI LatAm by 12% and 17%, respectively, over the last three months." LAN Airlines is currently trading at $28.01.