Air Canada (AC:CA) is gearing up to release its fourth-quarter results on February 14, 2025, amid considerable anticipation from the market.
This announcement follows the company’s strong strategic initiatives, including a share buyback program and continued expansion in international markets. Investors are keen to understand how seasonal trends and cost pressures might influence the carrier’s Q4 performance.
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Expected Q4 Earnings Report of Air Canada:
Air Canada is expected to post an EPS of CAD 0.27 for Q4 2024, reflecting gradual recovery and demand growth in international travel. This comes on the heels of strong Q3 results, where the airline outperformed analysts’ EPS forecasts significantly.
Air Canada’s guidance for full-year earnings remains robust, with core profitability expected to reach CAD 3.5 billion, supported by healthy demand and improved operational efficiency.
Analysts will focus on key metrics such as revenue growth and capacity expansion, especially as Air Canada targets mid-single-digit growth in 2025.
Stock Target Advisor’s Analysis on Air Canada:
Stock Target Advisor’s assessment of Air Canada is “Slightly Bullish,” reflecting 10 positive and 6 negative signals. Key strengths include high earnings growth (1,262.87% over five years), superior return on equity (139.92%), and undervaluation metrics, such as a price-to-cash-flow ratio of 1.7.
However, the airline’s high leverage (debt-to-equity ratio of 1,377.64%) and poor risk-adjusted returns remain concerns. The stock’s current price of CAD 17.74 is significantly below its average 12-month target price of CAD 25.01, suggesting a potential upside of approximately 41.8% based on Stock Target Advisor’s projections.
Recent Analyst Ratings and Targets
Recent ratings and corresponding price targets for Air Canada reflect a mixed sentiment:
- STA Research: Speculative Buy, Target: CAD 20
- Scotia Capital: Target Down, Target: CAD 23
- Morningstar: Hold, Target: CAD 17.2
- Stifel Nicolaus: Buy, Target: CAD 28
- Jefferies & Company: Buy, Target: CAD 23
The average analyst target price remains CAD 25.01, with a maximum of CAD 34 and a minimum of CAD 16. Overall, analysts have assigned a “Moderate Buy” rating to Air Canada, reflecting a cautious optimism for its near-term growth.
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Conclusion:
While Air Canada faces headwinds from cost pressures and leverage concerns, its strong demand environment, strategic initiatives, and robust financial performance are expected to fuel optimism.
The upcoming Q4 earnings report will be pivotal in shaping investor sentiment and setting the tone for the airline’s performance in 2025.
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.
