Investment analysts from Cormark have recently issued lowered earnings per share (EPS) forecasts for Air Canada (AC:CA) for fiscal year 2024. This deviation from the consensus estimates for Air Canada’s full-year earnings of $2.58 per share has raised concerns among some investors.
Stock Target Advisor’s Considered Outlook on Air Canada
The analysis presented by Stock Target Advisor, paints a slightly more optimistic picture for Air Canada’s outlook. With a “Buy” rating and a target price of C$26.67, Stock Target Advisor sees potential in the airline’s stock, in contrast to Cormark’s cautious stance.
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The trailing 12 months returns analysis reveals a 17.25% capital gain, with no dividend return, making the total 1-year return for the stock also 17.25%. Growth analysis for the past five years indicates convincing revenue growth of 20.86%, coupled with a staggering earnings growth of 1262.87%.
With a high stock volatility (Beta of 2.41) and a strong buy consensus from an average of 16 market covering analysts, Air Canada might prove to be a promising investment opportunity, despite Cormark’s pessimistic forecast.
Setting the Context: Sector Analysis for Airlines
The average analyst rating for the Airlines sector is a “Strong Buy”. Stock Target Advisor too-rated the sector as “Slightly Bullish”. However, the average 1-month return on stocks in the sector is trailing at -4.49%. While the largest stocks in the sector are Air Canada and Exchange Income Corporation, top-ranked analysts for the sector include Raymond James, Barclays, Deutsche Bank, J.P. Morgan Chase & Co, and Susquehanna International Group.
Conclusion:
Given this comprehensive data-driven analysis, the lowered FY2024 EPS estimates for Air Canada by Cormark could lead to some investor anxiety. Yet, the overall positive consensus among other analysts, along with historical return, revenue, and earnings growth, all weigh in favor of Air Canada.
Muzzammil is a content writer at Stock Target Advisor. He has been writing stock news and analysis at Stock Target Advisor since 2023 and has worked in the financial domain in various roles since 2020. He has previously worked on an equity research firm that analyzed companies listed on the stock markets in the U.S. and Canada and performed fundamental and qualitative analyses of management strength, business strategy, and product/services forecast as indicated by major brokers covering the stock.
