- Air Canada maintains its full-year adjusted EBITDA forecast between C$3.2 billion and C$3.6 billion, with an estimate at C$3.42 billion.
- The airline expects an increase in available seat miles between 1% and 3% for the year.
- For the third quarter, Air Canada forecasts available seat miles growth between 3.25% and 3.75%.
- In the second quarter, Air Canada reported operating revenue of C$5.63 billion, which is a 2% increase year-over-year, surpassing the estimate of C$5.55 billion.
- The operating profit for the second quarter was C$418 million, reflecting a 10% decline year-over-year.
- Adjusted EBITDA for the second quarter was C$909 million, a 0.5% decrease year-over-year, just below the estimate of C$926.9 million.
- The adjusted EPS for the second quarter was C$0.60, down from C$0.98 year-over-year, and below the estimate of C$0.70.
- Basic EPS for the period was C$0.51, compared to C$1.04 in the previous year.
- Total available seat miles in the second quarter reached 26.86 billion, marking a 2.5% increase year-over-year and exceeding the estimate of 26.72 billion.
- Passenger revenue per available seat mile (PRASM) was C$0.187, reflecting a 1.6% decline year-over-year.
- Revenue passenger miles were 22.80 billion, representing a 1.5% increase year-over-year, slightly above the estimate of 22.61 billion.
- The passenger load factor stood at 84.9%, down from 85.7% year-over-year, but above the estimate of 84.6%.
- Adjusted cost per available seat mile (CASM) was C$0.1440, an increase of 6.4% year-over-year.
- The company’s stock received 13 buy ratings, 2 hold ratings, and 1 sell rating based on the latest analyst opinions.
Air Canada on Smartkarma
Smartkarma, an independent investment research network, features insightful analyst coverage of Air Canada by Special Situation Investments. In their report titled “Air Canada‘s Odd-Lot Tender Offer: Potential Upside Amid CapEx Challenges and Transborder Revenue Declines,” the analyst highlights the airline’s tender offer for approximately 8% of shares, focusing on odd-lot holders and presenting potential upside opportunities. Despite facing challenges related to significant capital expenditures for fleet modernization, which could impact free cash flow and financial projections until 2028, Air Canada‘s valuation appears low compared to industry peers, currently trading at 3.3 times EBITDA and targeting a 54% EBITDA growth by 2028.
A look at Air Canada Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 3 | |
| Dividend | 1 | |
| Growth | 4 | |
| Resilience | 3 | |
| Momentum | 5 | |
| OVERALL SMART SCORE | 3.2 |
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
Looking ahead, Air Canada‘s long-term prospects seem promising based on their Smartkarma Smart Scores. With a strong momentum score of 5, the company is showing positive trends that could bode well for its future performance. Additionally, a growth score of 4 indicates that Air Canada is positioned for expansion and development in the aviation industry. These factors suggest that Air Canada may see continued success and growth in the coming years.
While the company scores well on growth and momentum, its dividend score is lower at 1, which may not be attractive to income-seeking investors. However, with solid value and resilience scores of 3, Air Canada demonstrates stability and reasonable valuation. Overall, Air Canada‘s diverse services covering various regions make it a key player in the airline industry, with potential for further growth and success in the long term.
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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