Copa 's stock could rally as air travel continues to rebound and industry-wide headwinds ease, according to JPMorgan. Analyst Guilherme Mendes upgraded the Latin American airline's stock to overweight from neutral. His price target of $132 presents an upside of 50.2% over where the stock closed Thursday. Mendes said Copa is attractive given its financials, specifically its debt-to-EBITDA ratio and liquidity. He also said the stock currently has a discounted valuation, which could make a good entry point for investors. "In our view Copa has a relatively comfortable balance sheet situation, with leverage expected to end 2023 at only 1.8x net debt to EBITDA, the lowest among LatAm carriers," Mendes said in a note Friday. "Also, immediate liquidity over short-term payables is the best among the cluster." The stock gained more than 1% in Friday trading. It eked out a 0.6% advance in 2022 despite the broader market's tumble. To be sure, Mendes noted factors like increased competition, weaker air travel recover than expected and re-elevated fuel prices could impact the stock's performance. Within the broader air travel sector, the analyst pointed to capacity increases and a 30% drop in jet fuel prices since October as evidence of an improving environment. But he said he is still "relatively cautious" compared to other industries given its exposure to fluctuating fuel costs and foreign exchange. Copa flies out of U.S. cities such as New York, Miami, Los Angeles and San Francisco and international destinations like Punta Cana, Lima and Panama. It was founded as the National Airline of Panama in 1947. — CNBC's Michael Bloom contributed to this report.