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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 Comparison
Image Source: Zacks Investment Research
Given 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 Stock
Image Source: Zacks Investment Research
Reasons for Staying Bullish on CPA Stock
Strong 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. Quote
Shareholder-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.