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What Do Transport Analysts Think of the Sector?

This week we interviewed some of the most prominent Institutional Investor rated analysts covering stocks in the LatAm transportation sector, which includes airports, roads, and airlines. Some topics covered in this interview are the relevant metrics for the sector, the strengths and weaknesses of a communication strategy, among other issues.


Most Relevant Metrics for the Transport Sector

Most of the analysts we interviewed said that the key operating metrics for them in airlines and airports are traffic, costs, and fuel prices. In terms of financial metrics, some of the analysts mentioned they focus on EBIT, EBITDA, return rates, and long-term financial metrics in general. One of the analysts mentioned that he likes how airports and airlines give monthly traffic updates, unlike roads and railroads, where you must wait for the quarter to end. He even mentioned that one airline has been giving a monthly update on fuel costs, which works as a read through for other airlines as well. 


What about the Earnings Report/Call?

In terms of the earnings release, analysts focus on the operating and financial statements (as usual).  Highlights, key financial and operating metrics, the balance sheet, rates, costs and the top line are among the focus items, and how these evolved during the quarter.  Analysts expect the companies to explain why things happened, rather than just what happened.

As for the CEO’s message, analysts said the most relevant subjects are the strategic vision for the company from the CEO’s perspective, including a panoramic vision of the industry, consumer behavior, and the post COVID economic situation. Having said that, one of the analysts mentioned not to overdo the global and macroeconomic context, as prefer to hear about factors under the company’s control.

For the earnings call, most analysts want the focus to be the company’s outlook. This doesn’t necessarily mean that all companies must provide formal guidance every quarter, but analysts at least expect companies will explain how the industry is doing and where the company is going, as well as opportunities, and short- and medium-term risks. Some things that can be included are sustainability metrics, or details on traffic and costs. The conference call should not be a read-through of the report, CEOs and CFOs should go beyond the results and go deeper into their explanations. Lastly, one of the interviewees mentioned that ideally there should only be one or two speakers.



The main concern of analysts is having enough access to management, as transportation companies are among the toughest to schedule a call with or visit, even when they have good IR teams. For some analysts the main concern is the lack of disclosure, or weak disclosure, as companies sometimes seem uncomfortable with less positive messages.


Communication Strategy

Analysts would like communication with the investor relations team to be available on demand. IR teams should at least have a check point once every two months. As for communication with top management, they felt that this should be available at least once per year (or hopefully even more).

Additionally, analysts think that companies should have NDRs at least 2 times per year, and they should coincide with conferences, making it easier for both analysts and investors to attend. Most of them mentioned companies in this sector should attend conferences at least once a month, but one of them thinks companies should actually be more selective should go to around 4 conferences per year.

Lastly, when asked about the five things they value most in terms of communication, most agreed that access to top management is number one. The second most relevant would be investor days, closely followed by access to the IR team and the earnings call and report.


Miranda IR’s Take on the Results

So, what can an IR team do with this information?

  1. Include the most relevant metrics in the highlights section at the beginning of the earnings release.
  2. Provide an unbiased perspective regarding the results.
  3. Analysts want the why, not just the what.
  4. We recommend all companies in this sector should provide monthly updates, as airports and airlines do. This will help analysts know what to expect from the quarterly report.
  5. The CEO’s message should include the industry’s outlook, and how it affects or benefits your company.
  6. For the conference call, keep in mind that it should not be a read through of the earnings release. The goal is to add value and answer markets concerns such as the post-pandemic economic recovery, passenger traffic, consumer’s behavior, fuel costs, etc.
  7. As an IRO, you should aim to be as available as possible.
  8. Analysts are also very interested in having one-on-one calls with the top management. Try to schedule this at least twice per year.

As always, in Miranda IR we would be more than happy to help you adapt your IR materials and communication strategy to better accommodate to the market’s needs.

Contacts at Miranda Partners

Damian Fraser
Miranda Partners

Ana María Ybarra Corcuera