ATB Cap Markets Upgrades Earnings Forecast for Air Canada

Air Canada (OTCMKTS:ACDVF - Free Report) is in the spotlight as analysts from Atb Cap Markets have revised their earnings estimates for the company for the fiscal year 2024. In a report released on Sunday, November 3rd, analyst C. Murray raised the earnings per share (EPS) forecast from $1.38 to $2.29. This is a significant upgrade that reflects the analysts' confidence in the airline's financial performance. The new estimate is above the consensus expectation of $1.65 EPS for the current year.

Additionally, Atb Cap Markets provided a detailed breakdown of earnings estimates for various quarters. The projected earnings for Q4 2024 are expected to be at -$0.03 EPS, followed by Q1 2025 at -$0.36 EPS. For Q2 2025, they forecast earnings of $0.31 EPS and an increased projection of $1.53 EPS for Q3 2025. There is an anticipated decline again in Q4 2025 with estimates at -$0.14 EPS, followed by expected earnings of $1.61 EPS for the fiscal year 2026.

In a separate analysis, Stifel Canada has upgraded Air Canada from a “hold” rating to a “strong-buy” rating, indicating a positive shift in sentiment towards the airline's stock.

Current Stock Performance

As for its stock performance, Air Canada saw a trading increase of 2.6%. On the morning of Wednesday, trading opened at $16.00, while the company holds a market capitalization of $5.74 billion. The price-to-earnings (PE) ratio stands at a low 3.31, along with a beta of 2.05, suggesting a higher volatility in the stock compared to the market. Over the past 50 days, the moving average price has been $12.49, whereas the two-hundred day moving average is $12.63. The current ratio is reported at 0.85 and the quick ratio at 0.81, with an alarming debt-to-equity ratio of 9.32. In the past year, the airline's stock reached a low of $10.16 and a high of $16.02.

Air Canada last shared its quarterly earnings on August 7th, providing a better-than-expected result of $0.72 EPS, surpassing analysts' predictions of $0.62 by a margin of $0.10. It reported revenues of $4.03 billion for that quarter, with a return on equity of 133.91% and a net margin of 11.53%.

About Air Canada

Air Canada is a leading airline that operates both domestic and international services. Apart from traditional scheduled passenger flights, it also manages services under its Air Canada Vacations and Air Canada Rouge brands. The airline has a strong market presence not only in Canada but also across transborder routes to the United States and various international destinations.

Conclusion

The adjustments made by ATB Cap Markets reflect a growing optimism about Air Canada's ability to increase earnings in the coming years. With significant upgrades in earnings forecasts and favorable analysis from other financial institutions, the outlook for Air Canada appears more promising.

Airline, Earnings, Forecast