LATAM Airlines Group S.A. reports May 7 with the stock down sharply and short sellers retreating — a combination that makes for an unusual setup.
The stock has shed 8% over the past month, closing at $45.26 on May 4 after a 4.2% drop in a single session. That weakness has not convinced shorts to press harder. Shares short fell nearly 6% over the past week to roughly 3.36 million, continuing a quiet withdrawal after a brief spike in mid-April. The borrow market backs up that read: cost to borrow is a low 0.70% — well off the 1.44% peak seen in late March — and the borrow availability picture is loose. Short-score data shows a recent rise from 37 to 45.6, but that remains far from extreme. The utilization rank (89th percentile) reflects relative tightness compared to the broader universe, yet the absolute level of borrowing is modest. Overall, the lending market does not point to an aggressive bear thesis.
Options traders have actually become less defensive as the print approaches. The put/call ratio has drifted down to 0.99, notably below its 20-day average of 1.10 — running nearly a standard deviation lighter on hedging than has been typical. That stands in contrast to early April, when the PCR was running above 1.4 on heavy tariff-related anxiety. The retreat in defensive positioning suggests investors are not bracing for a disaster, even as the price action weakens.
The fundamental backdrop gives bulls something to work with. LATAM carries estimated revenue of $16.2 billion, EBITDA of $4.1 billion, and net income of $1.6 billion — a P/E ratio of roughly 8x and an EV/EBITDA near 4.9x on forward estimates, both compressed multiples for a carrier that has now fully restructured. The analyst recommendation differential ranks in the 93rd percentile, indicating the street leans more positively on the stock than on most peers. The institutional register is anchored: Delta Air Lines holds around 10.6% and Qatar Airways a similar stake, alongside major pension-fund holders in Chile. There is no evidence of meaningful institutional selling near-term. Net debt of $5.6 billion against strong operating cash flow of $3.8 billion is the lever bears watch most closely, particularly in a high-rate, FX-volatile environment for Latin America.
The May 7 print is therefore less a question of whether LATAM's recovery story is intact and more a test of whether management can demonstrate that margin resilience and cash generation are holding up against a tougher macro backdrop — especially after back-to-back negative post-earnings price reactions of 3% and 11% seen in earlier 2026 events.
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