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LATAM Airlines (LTM) stock trades at 8.0 times earnings, compared with 23.0 for the median S&P 500 company. The shares fell 19.0% from July 28 to October 26, 2026, while the S&P 500 gained 3.6%. The current price appears to assume LATAM’s profit will shrink. The stock is a bargain only if the airline maintains its profit recovery and its fares catch up with a much higher fuel bill. So how solid is the profit behind that multiple?

LATAM’s Margin Has Risen Every Year Since 2021

Over the longer run, LATAM’s profit has recovered strongly. LATAM’s operating margin rose in every twelve-month period ending in June since 2021, climbing…