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AC

Air CanadaTSX:AC Stock Report

Market Cap

CA$8.4b

7D

2.3%

1Y

49.0%

Updated

25 Sep, 2021

Data

Company Financials +
AC fundamental analysis
Snowflake Score
Valuation2/6
Future Growth6/6
Past Performance0/6
Financial Health3/6
Dividends0/6

AC Overview

Air Canada provides domestic, U.S. transborder, and international airline services.

Air Canada Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Air Canada
Historical stock prices
Current Share PriceCA$23.54
52 Week HighCA$14.48
52 Week LowCA$31.00
Beta2.48
1 Month Change-4.93%
3 Month Change-9.15%
1 Year Change48.99%
3 Year Change-14.71%
5 Year Change122.08%
Change since IPO20.23%

Recent News & Updates

Shareholder Returns

ACCA AirlinesCA Market
7D2.3%6.8%-0.3%
1Y49.0%48.5%30.8%

Return vs Industry: AC matched the Canadian Airlines industry which returned 48.5% over the past year.

Return vs Market: AC exceeded the Canadian Market which returned 30.8% over the past year.

Price Volatility

Is AC's price volatile compared to industry and market?
AC volatility
AC Beta2.48
Industry Beta1.53
Market Beta1

Stable Share Price: AC is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: AC's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
193716,100Mike Rousseauhttps://www.aircanada.com

Air Canada provides domestic, U.S. transborder, and international airline services. It offers scheduled passenger services under the Air Canada Vacations and Air Canada Rouge brand name in the Canadian market, the Canada-U.S. transborder market, and in the international market to and from Canada, as well as through capacity purchase agreements on other regional carriers.

Air Canada Fundamentals Summary

How do Air Canada's earnings and revenue compare to its market cap?
AC fundamental statistics
Market CapCA$8.42b
Earnings (TTM)-CA$4.31b
Revenue (TTM)CA$3.15b

2.7x

P/S Ratio

-2.0x

P/E Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
AC income statement (TTM)
RevenueCA$3.15b
Cost of RevenueCA$5.02b
Gross Profit-CA$1.87b
ExpensesCA$2.44b
Earnings-CA$4.31b

Last Reported Earnings

Jun 30, 2021

Next Earnings Date

Nov 02, 2021

Earnings per share (EPS)-12.06
Gross Margin-59.46%
Net Profit Margin-136.98%
Debt/Equity Ratio1,620.6%

How did AC perform over the long term?

See historical performance and comparison

Valuation

Is Air Canada undervalued compared to its fair value and its price relative to the market?

47.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: AC (CA$23.54) is trading below our estimate of fair value (CA$44.81)

Significantly Below Fair Value: AC is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: AC is unprofitable, so we can't compare its PE Ratio to the North American Airlines industry average.

PE vs Market: AC is unprofitable, so we can't compare its PE Ratio to the Canadian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate AC's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: AC is overvalued based on its PB Ratio (14.6x) compared to the XN Airlines industry average (2.5x).


Future Growth

How is Air Canada forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

73.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AC is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.5%).

Earnings vs Market: AC is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: AC's is expected to become profitable in the next 3 years.

Revenue vs Market: AC's revenue (33.4% per year) is forecast to grow faster than the Canadian market (6% per year).

High Growth Revenue: AC's revenue (33.4% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AC's Return on Equity is forecast to be very high in 3 years time (172.8%).


Past Performance

How has Air Canada performed over the past 5 years?

-64.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AC is currently unprofitable.

Growing Profit Margin: AC is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: AC is unprofitable, and losses have increased over the past 5 years at a rate of 64.3% per year.

Accelerating Growth: Unable to compare AC's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: AC is unprofitable, making it difficult to compare its past year earnings growth to the Airlines industry (5.3%).


Return on Equity

High ROE: AC has a negative Return on Equity (-747.83%), as it is currently unprofitable.


Financial Health

How is Air Canada's financial position?


Financial Position Analysis

Short Term Liabilities: AC's short term assets (CA$6.2B) exceed its short term liabilities (CA$5.6B).

Long Term Liabilities: AC's short term assets (CA$6.2B) do not cover its long term liabilities (CA$20.3B).


Debt to Equity History and Analysis

Debt Level: AC's debt to equity ratio (1620.6%) is considered high.

Reducing Debt: AC had negative shareholder equity 5 years ago, but is now positive and has therefore improved.


Balance Sheet


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: AC has sufficient cash runway for more than a year based on its current free cash flow.

Forecast Cash Runway: Insufficient data to determine if AC has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.


Dividend

What is Air Canada current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate AC's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate AC's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if AC's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if AC's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of AC's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.1yrs

Average management tenure


CEO

Mike Rousseau (63 yo)

0.58

Tenure

CA$2,938,206

Compensation

Mr. Michael Stewart Rousseau, also known as Mike, has been Chief Executive Officer and President of Air Canada, a subsidiary of Ace Aviation Holdings Inc. since February 15, 2021 and its Director since Jun...


CEO Compensation Analysis

Compensation vs Market: Mike's total compensation ($USD2.31M) is below average for companies of similar size in the Canadian market ($USD3.54M).

Compensation vs Earnings: Mike's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: AC's management team is considered experienced (4.1 years average tenure).


Board Members

Experienced Board: AC's board of directors are considered experienced (5.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: AC insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 20.6%.


Top Shareholders

Company Information

Air Canada's employee growth, exchange listings and data sources


Key Information

  • Name: Air Canada
  • Ticker: AC
  • Exchange: TSX
  • Founded: 1937
  • Industry: Airlines
  • Sector: Transportation
  • Market Cap: CA$8.421b
  • Shares outstanding: 357.74m
  • Website: https://www.aircanada.com

Number of Employees


Location

  • Air Canada
  • 7373 Côte Vertu Boulevard West
  • Saint-Laurent
  • Quebec
  • H4Y 1H4
  • Canada

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/09/25 22:01
End of Day Share Price2021/09/24 00:00
Earnings2021/06/30
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.