Grupo Aeromexico S.A.B. de C.V. American Depositary Shares (each representing ten (10) Common Shares) (AERO) fair value

ACCE thesis

Grupo Aeromexico runs Mexico's largest airline, flying domestic and international routes out of Mexico City and carrying premium cabin and loyalty revenue through its Clubpremier program. Its structural edge is a slot-constrained home hub at Mexico City's AICM and a strong position on Mexico-US and Mexico-South America routes, where competitors have little room to add capacity. Revenue grew 13.6% on the most recent figures and operating margin reached 11.7%, which is solid for an airline, while the stock trades at a trailing P/E of 1.5 and a forward P/E of 8.7, a sharp discount to the group's earnings power if those margins hold. The offsetting problem is a 0.0% ROE and a score of 47/100, so the balance sheet and fuel and currency exposure need to be checked before anyone treats the low multiple as cheap rather than deserved. Index membership is absent, which adds to the case for a closer look at liquidity and float.