Copa Holdings, S.A. (CPA) | Investment Case

1. Company Snapshot

1.a. Company Description

Copa Holdings, S.A., through its subsidiaries, provides airline passenger and cargo services.The company offers approximately 204 daily scheduled flights to 69 destinations in 29 countries in North, Central, and South America, as well as the Caribbean from its Panama City hub.As of December 31, 2021, it operated a fleet of 91 aircraft comprising 77 Boeing 737-Next Generation aircraft and 14 Boeing 737 MAX 9 aircraft.

Copa Holdings, S.A. was founded in 1947 and is based in Panama City, Panama.

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1.b. Last Insights on CPA

Copa Holdings' recent momentum is fueled by robust Q3 earnings, which surpassed estimates with $4.2 per share. Rising demand and capacity gains contributed to this growth, despite cost pressures. The company's traffic improved year over year in December, with RPM outpacing capacity growth and pushing load factor higher. Additionally, institutional investments, such as Cullen Capital Management LLC's increased stake, demonstrate confidence in the company's prospects.

1.c. Company Highlights

Last Price	142.33
Change Percentage	2.15%
Open	139.32
Previous Close	139.34
Market Cap ( Millions)	5872
Volume	343844
Year High	156.41
Year Low	82.54
M A 50	132.3
M A 200	119.13

FCF Yield	6.27%
Dividend Yield	4.52%
ROE	25.62%
Debt / Equity	92.36%
Net Debt / EBIDTA	177.40%
Price To Book	2.12
Price Earnings Ratio	8.74
Price To FCF	15.95
Price To sales	1.62
EV / EBITDA	6.55

2. Copa Holdings' Strong Q4 Earnings Reflect Regional Demand and Operational Efficiency

Copa Holdings reported a net profit of $172.6 million or $4.18 per share for the fourth quarter, a 5.3% increase in earnings per share compared to the same period last year. The company's operating profit came in at $209.6 million, with an operating margin of 21.8%. Revenue per available seat mile (RASM) was 11.3¢, flat versus the fourth quarter of 2024. For the full year 2025, Copa Holdings reported a net profit of $671.6 million or $16.28 per share, an 11.9% year-over-year increase in earnings per share. The actual EPS of $4.18 was below estimates of $4.44.

Publication Date: Feb -19

                                    📋 Highlights
                                    Strong Profitability Growth::
                                                Copa reported Q4 net profit of $172.6M ($4.18 EPS), a 5.3% EPS increase YoY; full-year net profit rose to $671.6M ($16.28 EPS), up 11.9% YoY.
Capacity Expansion Plans::
                                                Targets 11–13% ASM growth in 2026, with 90% from 2025 additions, while maintaining a 22–24% operating margin guidance.
Load Factor and Efficiency::
                                                Full-year 2025 load factor improved 0.7pp to 87%, driven by disciplined capacity management and demand resilience, despite flat RASM of 11.3¢ in Q4.
Financial Strength::
                                                Holds $1.6B in cash and investments (44% of 12-month revenues), with $200M buyback program half executed.
Cost Discipline::
                                                Full-year CASM dropped 3.6% to 8.6¢, reflecting operational efficiency, and CASM ex-fuel guidance at $0.057 supports margin resilience.

                                

Operational Performance

The airline increased capacity by 9.9% year-over-year in Q4, with passenger traffic growing 10.1%. Load factor increased 0.2 percentage points to 86.4%. For the full year 2025, capacity in ASMs grew 7.8% year-over-year, while passenger traffic measured in RPMs increased by 8.6%. The load factor increased 0.7 percentage points to 87%. As Pedro Heilbron mentioned, the company continues to expand its network, adding frequencies and new cities to its Hub of the Americas.

Guidance and Outlook

Copa Holdings expects to grow capacity in the range of 11% to 13% in 2026, with around 90% of the growth coming from the full-year impact of capacity added in 2025 and additional frequencies in existing markets. The company is guiding to an operating margin within the range of 22% to 24%, based on a load factor of approximately 87%, unit revenues of approximately $0.11-$0.12, CASM ex-fuel of approximately $0.057, and an all-in fuel price of $2.50 per gallon.

Valuation

Copa Holdings' current valuation multiples are as follows: P/E Ratio of 9.05, P/B Ratio of 2.19, P/S Ratio of 1.68, EV/EBITDA of 6.72, Dividend Yield of 4.37%, Free Cash Flow Yield of 6.06%, ROIC of 13.07%, and ROE of 25.62%. Analysts estimate next year's revenue growth at 7.2%. The dividend yield and ROE suggest that the company is generating strong returns for shareholders.

Dividend and Share Buyback

The Board of Directors has approved a quarterly dividend payment of $1.71 per share to be paid in March, June, September, and December. Additionally, the company has executed more or less half of the $200 million share buyback program, with the other half remaining open, as mentioned by Daniel Tapia.

3. NewsRoom

Copa (NYSE:CPA) Shares Gap Down – Time to Sell?

Feb -22

Source: defenseworld.net

Wall Street Analysts See a 29.32% Upside in Copa Holdings (CPA): Can the Stock Really Move This High?

Feb -20

Source: zacks.com

Buy These 5 Low-Leverage Stocks as Softness in Software Remains a Drag

Feb -18

Source: zacks.com

Here Are Friday’s Top Wall Street Analyst Research Calls: Airbnb, AMD, Broadcom, CrowdStrike, Dollar Tree, Medtronic, Pinterest, Rivian, Roku, Tapestry, and More

Feb -13

Source: 247wallst.com

Copa Holdings, S.A. (CPA) Q4 2025 Earnings Call Transcript

Feb -12

Source: seekingalpha.com

Copa Holdings Earnings Fall Short of Estimates in Q4, Improve Y/Y

Feb -12

Source: zacks.com

Compared to Estimates, Copa Holdings (CPA) Q4 Earnings: A Look at Key Metrics

Feb -12

Source: zacks.com

Copa Holdings (CPA) Q4 Earnings and Revenues Lag Estimates

Feb -11

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.48%)

6. Segments

Passenger

Expected Growth: 6.5%

Copa Holdings' 6.5% passenger growth driven by increasing demand for air travel in Latin America, fueled by rising middle-class incomes, urbanization, and tourism. Additionally, Copa's strategic hub in Panama City, modern fleet, and competitive pricing strategy contribute to its market share gains.

Cargo and Mail

Expected Growth: 5.5%

Copa Holdings' Cargo and Mail segment growth of 5.5% is driven by increasing e-commerce demand, strategic partnerships with courier services, and expanded capacity in key Latin American markets. Additionally, the company's modernized fleet and efficient logistics operations enable faster and more reliable cargo transportation, further supporting growth.

Miles Redeemed

Expected Growth: 6.0%

The 6.0% growth in miles redeemed from Copa Holdings, S.A. is driven by increased travel demand, successful loyalty program enhancements, and strategic partnerships. Additionally, Copa's expanded route network, improved customer experience, and competitive redemption rates have contributed to the growth.

Frequent Flyer Program - Marketing Services

Expected Growth: 7.5%

Copa Holdings' Frequent Flyer Program - Marketing Services growth is driven by increasing loyalty program membership, strategic partnerships, and targeted marketing campaigns. Additionally, the company's strong brand reputation, expanded route network, and improved customer experience contribute to the 7.5% growth.

Other

Expected Growth: 6.8%

Copa Holdings' 6.8% growth in 'Other' segment is driven by increased demand for ancillary services, such as baggage fees and travel insurance, as well as higher revenue from cargo operations. Additionally, the company's strategic partnerships and codeshare agreements have contributed to the growth, allowing it to expand its reach and offer more services to customers.

7. Detailed Products

Passenger Transportation

Copa Holdings offers passenger transportation services through its Copa Airlines brand, providing flights to over 70 destinations in 30 countries in North, Central, and South America, and the Caribbean.

Cargo Transportation

Copa Holdings provides cargo transportation services, offering a range of cargo solutions for businesses and individuals, including express, economy, and specialized cargo services.

Aircraft Leasing

Copa Holdings offers aircraft leasing services, providing airlines with access to a fleet of modern, fuel-efficient aircraft.

Airport Services

Copa Holdings provides airport services, including ground handling, cargo handling, and airport operations, at Tocumen International Airport in Panama.

8. Copa Holdings, S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Copa Holdings, S.A. is medium due to the presence of alternative modes of transportation such as buses, trains, and cars. However, air travel remains a preferred mode of transportation for many passengers, reducing the threat of substitutes.

Bargaining Power Of Customers

The bargaining power of customers for Copa Holdings, S.A. is low due to the lack of switching options for passengers. Once a passenger has booked a flight, it is difficult to change to a different airline, giving Copa Holdings, S.A. an upper hand in negotiations.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Copa Holdings, S.A. is medium due to the presence of multiple suppliers of aircraft, fuel, and other essential services. However, the airline industry is highly dependent on a few large suppliers, giving them some bargaining power.

Threat Of New Entrants

The threat of new entrants for Copa Holdings, S.A. is low due to the high barriers to entry in the airline industry. Starting a new airline requires significant capital investment, regulatory approvals, and establishment of a network of routes and services.

Intensity Of Rivalry

The intensity of rivalry for Copa Holdings, S.A. is high due to the presence of several established airlines in the Latin American market. The airline industry is highly competitive, with airlines competing on price, service, and route network.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	41.91%
Debt Cost	10.77%
Equity Weight	58.09%
Equity Cost	10.95%
WACC	10.88%
Leverage	72.14%

11. Quality Control: Copa Holdings, S.A. passed 5 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Copa

A-Score: 7.3/10

Value: 6.9

Growth: 4.3

Quality: 6.1

Yield: 8.0

Momentum: 9.0

Volatility: 9.3

1-Year Total Return ->

Aena

A-Score: 7.2/10

Value: 6.2

Growth: 7.1

Quality: 7.7

Yield: 6.9

Momentum: 6.0

Volatility: 9.3

1-Year Total Return ->

TransDigm Group

A-Score: 7.0/10

Value: 3.0

Growth: 8.0

Quality: 6.7

Yield: 9.0

Momentum: 7.0

Volatility: 8.3

1-Year Total Return ->

PACCAR

A-Score: 6.0/10

Value: 4.1

Growth: 6.7

Quality: 5.0

Yield: 8.0

Momentum: 4.0

Volatility: 8.3

1-Year Total Return ->

Ryanair

A-Score: 5.9/10

Value: 4.7

Growth: 7.8

Quality: 6.8

Yield: 1.2

Momentum: 8.5

Volatility: 6.3

1-Year Total Return ->

BAE Systems

A-Score: 4.9/10

Value: 2.4

Growth: 6.8

Quality: 4.9

Yield: 5.0

Momentum: 4.5

Volatility: 6.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

9.63%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

10.88%

Copa Holdings, S.A. - PAP310761054

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on CPA

1.c. Company Highlights

Less Volatile

Higher Yield

Better Quality

Earnings Beats

Revenues Beats

Revenues Miss

Strong Momentum

Expensive

2. Copa Holdings' Strong Q4 Earnings Reflect Regional Demand and Operational Efficiency

Operational Performance

Guidance and Outlook

Valuation

Dividend and Share Buyback

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.48%)

6. Segments

Passenger

Expected Growth: 6.5%

Cargo and Mail

Expected Growth: 5.5%

Miles Redeemed

Expected Growth: 6.0%

Frequent Flyer Program - Marketing Services

Expected Growth: 7.5%

Other

Expected Growth: 6.8%

7. Detailed Products

Passenger Transportation

Cargo Transportation

Aircraft Leasing

Airport Services

8. Copa Holdings, S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Copa Holdings, S.A. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

142.33$

Current Price

142.33$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA