- Air Canada forecasts its adjusted EBITDA for the fiscal year to be between C$2.9 billion and C$3.1 billion, which is below the estimate of C$3.18 billion.
- For the third quarter, Air Canada predicts adjusted EBITDA to be between C$950 million and C$1 billion, missing the estimate of C$1.24 billion.
- The airline expects available seat miles to increase between 0.5% to 1.5%.
- Third-quarter operated capacity is projected to decrease by about 2% year-over-year.
- The recent strike is expected to impact Air Canada‘s revenue by approximately C$430 million.
- The strike is also anticipated to affect the operating income and adjusted EBITDA by around C$375 million.
- Air Canada and CUPE are moving to arbitration to finalize wage negotiations in a four-year tentative agreement; no labor disruptions are allowed during this time.
- Analysts’ recommendations for Air Canada‘s stock include 11 buys, 4 holds, and no sells.
Air Canada on Smartkarma
Analyst coverage of Air Canada on Smartkarma by Special Situation Investments focuses on the odd-lot tender offer the airline is conducting. The research report, titled “Air Canada‘s Odd-Lot Tender Offer: Potential Upside Amid CapEx Challenges and Transborder Revenue Declines,” highlights the company’s initiative to buy back approximately 8% of shares, with a specific focus on odd-lot holders. Despite facing challenges in capital expenditure for fleet modernization, the offer presents a potential upside for investors. The report also notes that Air Canada‘s valuation is relatively low compared to its peers, currently trading at 3.3 times EBITDA, with a target of 54% EBITDA growth by 2028.
A look at Air Canada Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 3 | |
| Dividend | 1 | |
| Growth | 4 | |
| Resilience | 3 | |
| Momentum | 3 | |
| OVERALL SMART SCORE | 2.8 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Based on the Smartkarma Smart Scores, Air Canada seems to have a positive long-term outlook with strong indicators in growth and resilience. With a growth score of 4, the company is likely poised for expansion and increasing profitability in the future due to factors such as market trends and strategic initiatives. Additionally, a resilience score of 3 suggests that Air Canada has the ability to withstand economic downturns or other challenges, indicating a level of stability and adaptability.
Although the company scores lower in areas such as dividend and momentum, with scores of 1 and 3 respectively, the overall outlook remains favorable. The value score of 3 implies that Air Canada may be fairly valued in the market, offering potential for investors seeking a balance between risk and return. With its broad range of services spanning various regions, including Canada, the United States, Europe, Asia, the Middle East, and the Caribbean, Air Canada‘s diverse market presence further supports its future growth potential and resilience in the airline industry.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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