Intrinsic value of LATAM Airlines Group S.A. - LTM

Previous Close

$10.13

  Intrinsic Value

$16.80

stock screener

  Rating & Target

str. buy

+66%

Previous close

$10.13

 
Intrinsic value

$16.80

 
Up/down potential

+66%

 
Rating

str. buy

We calculate the intrinsic value of LTM stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 6.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  7.00
  6.80
  6.62
  6.46
  6.31
  6.18
  6.06
  5.96
  5.86
  5.77
  5.70
  5.63
  5.56
  5.51
  5.46
  5.41
  5.37
  5.33
  5.30
  5.27
  5.24
  5.22
  5.20
  5.18
  5.16
  5.14
  5.13
  5.12
  5.10
  5.09
Revenue, $m
  10,287
  10,986
  11,714
  12,470
  13,257
  14,077
  14,930
  15,820
  16,747
  17,714
  18,723
  19,777
  20,877
  22,027
  23,230
  24,487
  25,802
  27,178
  28,618
  30,127
  31,706
  33,361
  35,095
  36,912
  38,816
  40,813
  42,906
  45,101
  47,403
  49,818
Variable operating expenses, $m
  8,076
  8,596
  9,137
  9,699
  10,284
  10,893
  11,528
  12,189
  12,878
  13,597
  13,918
  14,702
  15,520
  16,375
  17,268
  18,203
  19,180
  20,203
  21,274
  22,395
  23,570
  24,800
  26,089
  27,439
  28,855
  30,339
  31,895
  33,527
  35,239
  37,034
Fixed operating expenses, $m
  1,572
  1,606
  1,642
  1,678
  1,715
  1,753
  1,791
  1,830
  1,871
  1,912
  1,954
  1,997
  2,041
  2,086
  2,132
  2,179
  2,226
  2,275
  2,326
  2,377
  2,429
  2,482
  2,537
  2,593
  2,650
  2,708
  2,768
  2,829
  2,891
  2,954
Total operating expenses, $m
  9,648
  10,202
  10,779
  11,377
  11,999
  12,646
  13,319
  14,019
  14,749
  15,509
  15,872
  16,699
  17,561
  18,461
  19,400
  20,382
  21,406
  22,478
  23,600
  24,772
  25,999
  27,282
  28,626
  30,032
  31,505
  33,047
  34,663
  36,356
  38,130
  39,988
Operating income, $m
  639
  784
  935
  1,093
  1,258
  1,431
  1,611
  1,800
  1,998
  2,205
  2,851
  3,078
  3,317
  3,567
  3,830
  4,105
  4,395
  4,699
  5,019
  5,354
  5,708
  6,079
  6,469
  6,879
  7,311
  7,765
  8,243
  8,745
  9,274
  9,830
EBITDA, $m
  3,728
  4,054
  4,393
  4,747
  5,116
  5,500
  5,901
  6,320
  6,758
  7,215
  7,693
  8,193
  8,716
  9,263
  9,837
  10,438
  11,067
  11,727
  12,419
  13,145
  13,907
  14,706
  15,545
  16,425
  17,349
  18,319
  19,338
  20,408
  21,532
  22,713
Interest expense (income), $m
  0
  427
  483
  541
  600
  663
  727
  795
  865
  938
  1,014
  1,094
  1,177
  1,263
  1,354
  1,448
  1,547
  1,651
  1,759
  1,872
  1,990
  2,114
  2,244
  2,380
  2,523
  2,672
  2,829
  2,993
  3,165
  3,345
  3,535
Earnings before tax, $m
  212
  301
  395
  493
  596
  704
  817
  935
  1,060
  1,191
  1,757
  1,902
  2,053
  2,213
  2,381
  2,558
  2,744
  2,940
  3,147
  3,364
  3,593
  3,835
  4,089
  4,357
  4,639
  4,937
  5,250
  5,580
  5,929
  6,295
Tax expense, $m
  57
  81
  107
  133
  161
  190
  221
  253
  286
  321
  474
  513
  554
  598
  643
  691
  741
  794
  850
  908
  970
  1,035
  1,104
  1,176
  1,253
  1,333
  1,418
  1,507
  1,601
  1,700
Net income, $m
  155
  220
  288
  360
  435
  514
  596
  683
  774
  869
  1,283
  1,388
  1,499
  1,616
  1,738
  1,867
  2,003
  2,146
  2,297
  2,456
  2,623
  2,799
  2,985
  3,180
  3,387
  3,604
  3,833
  4,074
  4,328
  4,596

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  20,131
  21,500
  22,923
  24,404
  25,944
  27,548
  29,218
  30,958
  32,773
  34,665
  36,640
  38,702
  40,856
  43,106
  45,459
  47,919
  50,493
  53,186
  56,005
  58,956
  62,047
  65,286
  68,678
  72,234
  75,961
  79,868
  83,965
  88,261
  92,766
  97,492
Adjusted assets (=assets-cash), $m
  20,131
  21,500
  22,923
  24,404
  25,944
  27,548
  29,218
  30,958
  32,773
  34,665
  36,640
  38,702
  40,856
  43,106
  45,459
  47,919
  50,493
  53,186
  56,005
  58,956
  62,047
  65,286
  68,678
  72,234
  75,961
  79,868
  83,965
  88,261
  92,766
  97,492
Revenue / Adjusted assets
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
  0.511
Average production assets, $m
  13,301
  14,206
  15,146
  16,124
  17,142
  18,201
  19,305
  20,455
  21,654
  22,904
  24,209
  25,571
  26,994
  28,481
  30,036
  31,661
  33,362
  35,141
  37,004
  38,954
  40,996
  43,136
  45,377
  47,727
  50,189
  52,771
  55,477
  58,316
  61,293
  64,415
Working capital, $m
  -2,911
  -3,109
  -3,315
  -3,529
  -3,752
  -3,984
  -4,225
  -4,477
  -4,739
  -5,013
  -5,299
  -5,597
  -5,908
  -6,234
  -6,574
  -6,930
  -7,302
  -7,691
  -8,099
  -8,526
  -8,973
  -9,441
  -9,932
  -10,446
  -10,985
  -11,550
  -12,142
  -12,764
  -13,415
  -14,099
Total debt, $m
  8,947
  10,012
  11,119
  12,271
  13,469
  14,717
  16,016
  17,370
  18,782
  20,254
  21,791
  23,395
  25,071
  26,821
  28,652
  30,566
  32,568
  34,663
  36,856
  39,153
  41,557
  44,077
  46,716
  49,483
  52,382
  55,422
  58,609
  61,951
  65,457
  69,133
Total liabilities, $m
  15,662
  16,727
  17,834
  18,986
  20,184
  21,432
  22,731
  24,086
  25,497
  26,970
  28,506
  30,110
  31,786
  33,537
  35,367
  37,281
  39,283
  41,379
  43,572
  45,868
  48,273
  50,792
  53,432
  56,198
  59,098
  62,137
  65,325
  68,667
  72,172
  75,849
Total equity, $m
  4,469
  4,773
  5,089
  5,418
  5,760
  6,116
  6,486
  6,873
  7,276
  7,696
  8,134
  8,592
  9,070
  9,570
  10,092
  10,638
  11,209
  11,807
  12,433
  13,088
  13,775
  14,493
  15,247
  16,036
  16,863
  17,731
  18,640
  19,594
  20,594
  21,643
Total liabilities and equity, $m
  20,131
  21,500
  22,923
  24,404
  25,944
  27,548
  29,217
  30,959
  32,773
  34,666
  36,640
  38,702
  40,856
  43,107
  45,459
  47,919
  50,492
  53,186
  56,005
  58,956
  62,048
  65,285
  68,679
  72,234
  75,961
  79,868
  83,965
  88,261
  92,766
  97,492
Debt-to-equity ratio
  2.000
  2.100
  2.180
  2.260
  2.340
  2.410
  2.470
  2.530
  2.580
  2.630
  2.680
  2.720
  2.760
  2.800
  2.840
  2.870
  2.910
  2.940
  2.960
  2.990
  3.020
  3.040
  3.060
  3.090
  3.110
  3.130
  3.140
  3.160
  3.180
  3.190
Adjusted equity ratio
  0.222
  0.222
  0.222
  0.222
  0.222
  0.222
  0.222
  0.222
  0.222
  0.222
  0.222
  0.222
  0.222
  0.222
  0.222
  0.222
  0.222
  0.222
  0.222
  0.222
  0.222
  0.222
  0.222
  0.222
  0.222
  0.222
  0.222
  0.222
  0.222
  0.222

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  155
  220
  288
  360
  435
  514
  596
  683
  774
  869
  1,283
  1,388
  1,499
  1,616
  1,738
  1,867
  2,003
  2,146
  2,297
  2,456
  2,623
  2,799
  2,985
  3,180
  3,387
  3,604
  3,833
  4,074
  4,328
  4,596
Depreciation, amort., depletion, $m
  3,089
  3,270
  3,458
  3,654
  3,857
  4,069
  4,290
  4,520
  4,760
  5,010
  4,842
  5,114
  5,399
  5,696
  6,007
  6,332
  6,672
  7,028
  7,401
  7,791
  8,199
  8,627
  9,075
  9,545
  10,038
  10,554
  11,095
  11,663
  12,259
  12,883
Funds from operations, $m
  3,244
  3,490
  3,746
  4,014
  4,292
  4,583
  4,886
  5,203
  5,533
  5,879
  6,124
  6,502
  6,898
  7,312
  7,745
  8,200
  8,676
  9,175
  9,698
  10,247
  10,822
  11,426
  12,060
  12,726
  13,424
  14,158
  14,928
  15,737
  16,586
  17,479
Change in working capital, $m
  -190
  -198
  -206
  -214
  -223
  -232
  -242
  -252
  -262
  -274
  -286
  -298
  -311
  -325
  -340
  -356
  -372
  -389
  -408
  -427
  -447
  -468
  -491
  -514
  -539
  -565
  -592
  -621
  -652
  -683
Cash from operations, $m
  3,434
  3,688
  3,952
  4,228
  4,515
  4,815
  5,128
  5,454
  5,796
  6,153
  6,410
  6,801
  7,209
  7,637
  8,086
  8,555
  9,048
  9,564
  10,106
  10,673
  11,269
  11,895
  12,551
  13,240
  13,963
  14,723
  15,520
  16,358
  17,238
  18,162
Maintenance CAPEX, $m
  -2,487
  -2,660
  -2,841
  -3,029
  -3,225
  -3,428
  -3,640
  -3,861
  -4,091
  -4,331
  -4,581
  -4,842
  -5,114
  -5,399
  -5,696
  -6,007
  -6,332
  -6,672
  -7,028
  -7,401
  -7,791
  -8,199
  -8,627
  -9,075
  -9,545
  -10,038
  -10,554
  -11,095
  -11,663
  -12,259
New CAPEX, $m
  -867
  -904
  -940
  -978
  -1,018
  -1,060
  -1,104
  -1,150
  -1,199
  -1,250
  -1,305
  -1,362
  -1,423
  -1,487
  -1,554
  -1,625
  -1,700
  -1,779
  -1,863
  -1,950
  -2,042
  -2,140
  -2,242
  -2,349
  -2,462
  -2,582
  -2,707
  -2,838
  -2,977
  -3,122
Cash from investing activities, $m
  -3,354
  -3,564
  -3,781
  -4,007
  -4,243
  -4,488
  -4,744
  -5,011
  -5,290
  -5,581
  -5,886
  -6,204
  -6,537
  -6,886
  -7,250
  -7,632
  -8,032
  -8,451
  -8,891
  -9,351
  -9,833
  -10,339
  -10,869
  -11,424
  -12,007
  -12,620
  -13,261
  -13,933
  -14,640
  -15,381
Free cash flow, $m
  81
  123
  171
  220
  272
  327
  384
  444
  506
  572
  524
  596
  672
  751
  835
  923
  1,015
  1,112
  1,215
  1,323
  1,436
  1,556
  1,682
  1,815
  1,956
  2,104
  2,260
  2,424
  2,598
  2,781
Issuance/(repayment) of debt, $m
  1,040
  1,065
  1,107
  1,152
  1,198
  1,248
  1,299
  1,354
  1,412
  1,472
  1,537
  1,604
  1,676
  1,751
  1,830
  1,914
  2,002
  2,095
  2,193
  2,296
  2,405
  2,519
  2,640
  2,766
  2,900
  3,040
  3,187
  3,342
  3,505
  3,677
Issuance/(repurchase) of shares, $m
  138
  84
  28
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,178
  1,149
  1,135
  1,152
  1,198
  1,248
  1,299
  1,354
  1,412
  1,472
  1,537
  1,604
  1,676
  1,751
  1,830
  1,914
  2,002
  2,095
  2,193
  2,296
  2,405
  2,519
  2,640
  2,766
  2,900
  3,040
  3,187
  3,342
  3,505
  3,677
Total cash flow (excl. dividends), $m
  1,259
  1,272
  1,306
  1,372
  1,471
  1,574
  1,683
  1,798
  1,918
  2,044
  2,061
  2,201
  2,348
  2,502
  2,665
  2,837
  3,017
  3,208
  3,408
  3,619
  3,841
  4,075
  4,322
  4,582
  4,855
  5,143
  5,447
  5,766
  6,103
  6,458
Retained Cash Flow (-), $m
  -293
  -304
  -316
  -329
  -342
  -356
  -371
  -386
  -403
  -420
  -438
  -458
  -478
  -500
  -522
  -546
  -571
  -598
  -626
  -655
  -686
  -719
  -753
  -789
  -827
  -867
  -909
  -954
  -1,000
  -1,049
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  966
  968
  990
  1,043
  1,129
  1,218
  1,313
  1,411
  1,515
  1,624
  1,622
  1,743
  1,869
  2,003
  2,143
  2,291
  2,446
  2,610
  2,782
  2,964
  3,155
  3,356
  3,569
  3,792
  4,028
  4,276
  4,537
  4,813
  5,103
  5,409
Discount rate, %
  7.00
  7.35
  7.72
  8.10
  8.51
  8.93
  9.38
  9.85
  10.34
  10.86
  11.40
  11.97
  12.57
  13.20
  13.86
  14.55
  15.28
  16.04
  16.85
  17.69
  18.57
  19.50
  20.48
  21.50
  22.58
  23.70
  24.89
  26.13
  27.44
  28.81
PV of cash for distribution, $m
  903
  840
  792
  764
  750
  729
  701
  666
  625
  579
  495
  449
  401
  353
  306
  261
  218
  179
  144
  114
  88
  67
  49
  35
  25
  17
  11
  7
  5
  3
Current shareholders' claim on cash, %
  97.8
  96.6
  96.2
  96.2
  96.2
  96.2
  96.2
  96.2
  96.2
  96.2
  96.2
  96.2
  96.2
  96.2
  96.2
  96.2
  96.2
  96.2
  96.2
  96.2
  96.2
  96.2
  96.2
  96.2
  96.2
  96.2
  96.2
  96.2
  96.2
  96.2

LATAM Airlines Group SA is a Chile-based company, which is engaged in passenger and cargo air transportation, both in the domestic markets of Chile, Peru, Argentina, Colombia, Ecuador and Brazil and in a developed series of regional and international routes in America, Europe and Oceania. These businesses are performed directly or through its subsidiaries in different countries. It operates through two segments: the Air transportation business and the Coalition and loyalty program Multiplus. It Air transportation segment corresponds to the route network for air transport. Its segment of Coalition and loyalty program called Multiplus is a frequent flyer programs, which operate as a unilateral system of loyalty that offers a flexible coalition system. The Company operates a fleet of over 329 aircrafts. Its passenger aircrafts include Airbus A319-100, Airbus A350-900, Boeing 767-300ER, Boeing 787-8, Boeing 787-9 and Boeing 777-300ER.

FINANCIAL RATIOS  of  LATAM Airlines Group S.A. (LTM)

Valuation Ratios
P/E Ratio 89
Price to Sales 0.7
Price to Book 1.5
Price to Tangible Book
Price to Cash Flow 6.2
Price to Free Cash Flow 29.4
Growth Rates
Sales Growth Rate -7.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -51.7%
Cap. Spend. - 3 Yr. Gr. Rate -11.3%
Financial Strength
Quick Ratio 1
Current Ratio 0.1
LT Debt to Equity 165.7%
Total Debt to Equity 210%
Interest Coverage 0
Management Effectiveness
Return On Assets 0.4%
Ret/ On Assets - 3 Yr. Avg. -0.7%
Return On Total Capital 0.6%
Ret/ On T. Cap. - 3 Yr. Avg. -1%
Return On Equity 2%
Return On Equity - 3 Yr. Avg. -3.1%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 22.5%
Gross Margin - 3 Yr. Avg. 21.5%
EBITDA Margin 3%
EBITDA Margin - 3 Yr. Avg. -0%
Operating Margin 5.5%
Oper. Margin - 3 Yr. Avg. 4.9%
Pre-Tax Margin 3%
Pre-Tax Margin - 3 Yr. Avg. -0%
Net Profit Margin 0.8%
Net Profit Margin - 3 Yr. Avg. -1.2%
Effective Tax Rate 59.5%
Eff/ Tax Rate - 3 Yr. Avg. 186.2%
Payout Ratio 59.4%

LTM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the LTM stock intrinsic value calculation we used $9614 million for the last fiscal year's total revenue generated by LATAM Airlines Group S.A.. The default revenue input number comes from 0001 income statement of LATAM Airlines Group S.A.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our LTM stock valuation model: a) initial revenue growth rate of 7% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 7%, whose default value for LTM is calculated based on our internal credit rating of LATAM Airlines Group S.A., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of LATAM Airlines Group S.A..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of LTM stock the variable cost ratio is equal to 78.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1538 million in the base year in the intrinsic value calculation for LTM stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for LATAM Airlines Group S.A..

Corporate tax rate of 27% is the nominal tax rate for LATAM Airlines Group S.A.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the LTM stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for LTM are equal to 129.3%.

Life of production assets of 0 years is the average useful life of capital assets used in LATAM Airlines Group S.A. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for LTM is equal to -28.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $4176.089 million for LATAM Airlines Group S.A. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 606.684 million for LATAM Airlines Group S.A. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of LATAM Airlines Group S.A. at the current share price and the inputted number of shares is $6.1 billion.

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