Air Canada (TSX:AC): Assessing Valuation Following Expanded Distribution and Onboard Upgrades

Air Canada (TSX:AC) is making waves with two key updates this week. The airline has rolled out its complete NDC content on Travelport+, expanding access for travel agents. It has also introduced complimentary beer, wine, and Canadian snacks on every flight.

See our latest analysis for Air Canada.

While Air Canada keeps making headlines with new product offerings and expanded routes, from maintaining Ottawa-London Heathrow flights year-round to boosting transborder capacity for next summer, the momentum hasn’t yet translated into a rally. The company’s share price sits at $18.02, with the 1-year total shareholder return barely in positive territory. This reflects tepid market sentiment but leaves the door open for a shift if operational improvements gain traction.

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After a roll-out of ambitious new routes and product perks, the big question is whether Air Canada’s current price reflects an undervaluation or if markets are already looking ahead. This leaves investors to wonder if there is a genuine buying opportunity here.

Most Popular Narrative: 27.6% Undervalued

With Air Canada trading at CA$18.02 and the most widely followed narrative setting fair value at CA$24.89, analysts see notable upside potential. The backdrop, however, includes both aggressive international moves and challenging cost trends.

Aggressive international long-haul network expansion, notably into Latin America, Europe, and Southeast Asia, alongside successful development of sixth freedom traffic, positions Air Canada to capture a larger share of connecting global passengers. This supports both top-line growth and load factor resilience.

Read the complete narrative.

Want to discover which bold forecasts are hiding under this optimistic valuation? The narrative hinges on ambitious expansion plans and some eyebrow-raising forward profit assumptions. The future growth map, margin pressures, and a surprising take on share buybacks are all packed inside. Don’t miss what’s driving this possible upside. See the numbers for yourself.

Result: Fair Value of $24.89 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent labor unrest and intensifying competition on key international routes remain major risks that could quickly disrupt this optimistic forecast.

Find out about the key risks to this Air Canada narrative.

Build Your Own Air Canada Narrative

If you see things differently, or want to dig into the data yourself, it takes just a few minutes to shape your own take on Air Canada’s story. Do it your way

A great starting point for your Air Canada research is our analysis highlighting 4 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary 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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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