Latam Airlines Group SA fell for a sixth straight day as investors bet the world’s biggest carrier by market value had become expensive relative to earnings.

Latam slid 1.4 percent to 12,342 pesos at the close in Santiago, the 10th drop in 12 days. The stock has lost 9.5 percent since June 21, when the company completed the combination of Lan Airlines SA with Brazil’s Tam SA. That’s the worst performance on Chile’s Ipsa index. The Bloomberg World Airlines Index is little changed in the same period.

“For me it’s clearly a matter of valuations,” said Cristian Jadue, an analyst at Banco Santander SA. “It’s trading at high valuations even when you incorporate synergies announced from the combination. Also, airlines are linked to the economic scenarios of other countries and that could affect the stock.”

Lan said it completed June 22 the takeover of Tam to create Latam Airlines, the 12th biggest carrier by revenue, according to data compiled by Bloomberg. Latam fetches 28.5 times reported earnings compared with its four-year average ratio of 21.7 times and the Bloomberg World Airlines Index’s 13.5.

Santander cut its recommendation for Latam to “underperform” on June 29 from “hold.” The airline has six buy ratings, six holds and four sells, according to data compiled by Bloomberg.

Editors: Glenn J. Kalinoski, James Attwood. To contact the reporter on this story: Eduardo Thomson in Santiago at ethomson1@bloomberg.net. To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net.

Tags: brazil