Brazil airline Azul falls on JPMorgan downgrade; Vamos upgraded

LATAM Airlines

10/07/2024 16:58

** Shares in Brazilian airline Azul  AZUL4.SA  fall as analysts
at JPMorgan downgrade their recommendation on the firm to
"Neutral" from "Overweight"
    ** JPMorgan says that Azul's current valuation represents a
10% premium on average to Panama's Copa  CPA.N  and Chile-based
LATAM  LTM.SN , its top picks among airlines in Latin America
    ** The premium, the analysts led by Guilherme Mendes note,
seems undeserved taking into account Azul's peers' superior free
cash flow and balance sheet outlook
    ** "We still prefer Azul over Underweight-rated Gol
 GOLL4.SA  among Brazilian airlines, and believe that a
potential M&A could unlock value for the two carriers although
we see it unlikely to materialize," they say
    ** Azul has been in talks with Gol's controller Abra Group
to "explore opportunities" as Gol faces a bankruptcy process
    ** On the other hand, the JPMorgan analysts upgrade truck
rental firm Vamos to "Overweight" from "Neutral," saying that
its results are set to sequentially improve 
    ** "Earnings visibility seems better than last year, also
when compared to car rental names," JPMorgan says 
    ** Shares of Azul slip more than 2.7%, the biggest faller on
Brazil's stock index Bovespa  .BVSP , while Vamos ranks as the
index's top gainer with a 3% rise
    ** Bovespa trades up 0.1%

 (Reporting by Gabriel Araujo)
 ((Gabriel.Araujo2@thomsonreuters.com; +55 11 5047-3352;))