Copa Holdings Up 22.6% YTD: Is the Stock Still Worth Betting on Now?

Shares of Latin American carrier, Copa Holdings CPA, have performed well on the bourses so far this year, gaining 22.6%, outperforming the Zacks Transportation - Airline industry and its U.S. counterparts, United Airlines UAL and Delta Air Lines DAL. The double-digit gain in the share price of CPA against the double-digit declines of United Airlines and Delta Air Lines seems to suggest that Copa Holdings has navigated the recent tariff-induced volatility well.YTD Price ComparisonImage Source: Zacks Investment ResearchGiven CPA’s impressive rally, investors might wonder if the opportunity to add this high-flying stock to their portfolio has passed. However, we believe CPA has a lot going in its favor, and this rally is far from over. In fact, the stock holds substantial upside potential. CPA currently has a Momentum Score of A. Technical indicators suggest continued strong performance for CPA. The stock trades above its 50-day moving average, signaling robust upward momentum and price stability. This technical strength underscores positive market sentiment and confidence in CPA’s prospects.50-Day Moving Average Data of CPA StockImage Source: Zacks Investment ResearchReasons for Staying Bullish on CPA StockStrong Air Travel Demand: Improvement in air travel demand following the end of the pandemic and normalization of economic activities bodes well for Copa Holdings' top line. To meet the upbeat demand, CPA is boosting capacity. For 2025, CPA expects consolidated capacity to grow 7-8% year over year and operating margin is expected to be in the range of 21-23%.Copa Holdings seems to have performed better with respect to air travel demand than its U.S. counterparts due to factors like regional economic expansion, better adaptation to market trends and focus on innovative strategies.Impressive Earnings Surprise History: Despite the tough conditions, the airline demonstrated resilience and beat the Zacks Consensus Estimate for earnings in each of the last four quarters, with the average beat being 5.5%.Copa Holdings Price and EPS Surprise Copa Holdings, S.A. price-eps-surprise | Copa Holdings, S.A. QuoteShareholder-Friendly Approach: CPA’s shareholder-friendly approach sheds light on its financial prosperity. The airline company’s high dividend yield is a huge positive for income-seeking investors. This highlights confidence in its cash flow and prospects. Copa Holdings currently pays a quarterly dividend of $1.61 per share. Copa Holdings' liquidity position is also encouraging. The airline ended first-quarter 2025 with cash and cash equivalents of $916.3 million, much higher than the current debt level of $232.4 million. This implies that the company has sufficient cash to meet its current debt obligations.Zacks Estimates Northbound: The Zacks Consensus Estimate for CPA’s 2025 and 2026 sales implies a year-over-year increase of 4.5% and 8.1%, respectively. The consensus mark for CPA’s 2025 EPS highlights a 14.3% year-over-year uptick. The consensus mark for 2026 EPS shows a 7.5% year-over-year increase. Moreover, EPS estimates for 2025 and 2026 have been trending northward over the past 30 days, reflecting analysts' bullishness on CPA.Image Source: Zacks Investment ResearchCompelling Stock Valuation: From a valuation perspective, Copa Holdings is still trading cheaper than the industry. Going by its price/earnings ratio, the company is trading at a forward earnings multiple of 6.28, much lower than the industry average of 11.12X. The company has a Value Score of A, like its U.S. counterparts, Delta Air Lines and United Airlines.Image Source: Zacks Investment ResearchCPA Still a Smart Buy for InvestorsCopa Holdings is likely to continue benefiting from the strong demand for air travel. The recent signs of the easing of tariff tensions are further tailwinds for the stock. The favorable valuation picture and rising earnings and sales estimates add to its appeal.With many positives driving the stock, CPA presents a compelling investment opportunity now. This Zacks Rank #2 (Buy) undervalued stock is an ideal candidate for addition to one’s portfolio. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Delta Air Lines, Inc. (DAL): Free Stock Analysis Report United Airlines Holdings Inc (UAL): Free Stock Analysis Report Copa Holdings, S.A. (CPA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks