One of the prominent stories sweeping the stock market in recent months is the impressive rise of Air Canada (AC: CA) shares, which have surged a striking 58% to $24.69 per share, lifting the company’s market cap to a robust $8.9 billion. This monumental growth has left investors questioning: is it too late to join in on an investment in Air Canada?
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Recent Surge in Stock Price:
Air Canada has been living up to its tag as the national carrier by delivering strong financial results and exhibiting unrivaled growth, notably in the summer months. The soaring stock performance shows immense confidence in Air Canada’s business, thanks to an enthusiastic rebound in the travel industry.
Is Air Canada Financially Viable?
With such robust stock growth, the question arises whether the company has the financial strength to sustain this ascending trajectory. Air Canada reported a strong liquidity position of $10.2 billion in the third quarter of 2024, demonstrating solid financial flexibility for future growth initiatives. The airline also generated $737 million in cash flow from operating activities in the same period, reflecting an improvement in efficiency.
Discover the latest Analyst Ratings and insights for Air Canada.
Another promising signal is the company’s recently announced share buyback program, indicating a vote of confidence from the management aimed at driving a further rise in the stock’s price while showing confidence in the company’s financial future.
Analysis from Stock Target Advisor:
Stock Target Advisor gives Air Canada a Buy rating, with a target price of $24.65, representing a marginal projected price change of -0.12% in 12 months. They credit several positive signals for their rating, including superior capital utilization, superior earnings growth, and a remarkable high gross profit to asset ratio.
Regarding analyst opinions, the scale tilts heavily in favor of the airline. Out of 16 covering analysts, the average rating is a Strong Buy. Among its supporters are top-ranked analysts from firms including Raymond James and Barclays, further cementing Air Canada’s position in the Airlines sector.
Conclusion:
While Air Canada’s recent surge may seem intimidating for many, the strong financials, favorable analyst recommendations, and an encouraging sector-wide performance suggest that the company is poised for further growth. As such, it seems it’s not too late to invest in Air Canada. However, investors are always advised to do their research and due diligence.
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.
