Air Canada

TSX:AC Stock Report

Market Cap: CA$8.0b

Air Canada Valuation

Is AC undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of AC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: AC (CA$23.16) is trading below our estimate of fair value (CA$264.05)

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

Key Valuation Metric

Which metric is best to use when looking at relative valuation for AC?

Other financial metrics that can be useful for relative valuation.

AC key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue0.5x
Enterprise Value/EBITDA4.3x
PEG Ratio-0.1x

Price to Earnings Ratio vs Peers

How does AC's PE Ratio compare to its peers?

The above table shows the PE ratio for AC vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average17.6x
EIF Exchange Income
22.9x27.8%CA$2.6b
CHR Chorus Aviation
14.3x41.1%CA$628.3m
TFII TFI International
26.9x23.1%CA$15.8b
293 Cathay Pacific Airways
6.2x-2.7%HK$52.3b
AC Air Canada
3.3x-27.3%CA$8.0b

Price-To-Earnings vs Peers: AC is good value based on its Price-To-Earnings Ratio (3.3x) compared to the peer average (17.6x).

Price to Earnings Ratio vs Industry

How does AC's PE Ratio compare vs other companies in the Global Airlines Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a17.4%
 n/an/an/a
No. of CompaniesPE048121620

Fetching data

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a17.4%
 n/an/an/a
No more companies

Price-To-Earnings vs Industry: AC is good value based on its Price-To-Earnings Ratio (3.3x) compared to the Global Airlines industry average (10.5x).

Price to Earnings Ratio vs Fair Ratio

What is AC's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

AC PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio3.3x
Fair PE Ratio7x

Price-To-Earnings vs Fair Ratio: AC is good value based on its Price-To-Earnings Ratio (3.3x) compared to the estimated Fair Price-To-Earnings Ratio (7x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst AC forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentCA$23.16
CA$22.45
-3.1%
19.2%CA$32.00CA$13.00n/a18
Oct ’25CA$16.13
CA$22.53
+39.7%
22.7%CA$36.00CA$13.00n/a17
Sep ’25CA$15.44
CA$22.68
+46.9%
22.7%CA$36.00CA$13.00n/a17
Aug ’25CA$15.46
CA$23.29
+50.6%
24.6%CA$41.00CA$14.30n/a17
Jul ’25CA$17.90
CA$27.36
+52.9%
23.1%CA$41.00CA$14.30n/a17
Jun ’25CA$18.20
CA$27.88
+53.2%
22.1%CA$41.00CA$14.30n/a16
May ’25CA$20.46
CA$28.37
+38.6%
22.2%CA$41.00CA$14.00n/a16
Apr ’25CA$20.12
CA$28.40
+41.1%
22.1%CA$41.00CA$14.00n/a16
Mar ’25CA$18.12
CA$28.67
+58.2%
22.5%CA$41.00CA$14.00n/a15
Feb ’25CA$18.25
CA$28.93
+58.5%
21.6%CA$42.00CA$15.00n/a15
Jan ’25CA$18.69
CA$28.60
+53.0%
21.8%CA$42.00CA$15.00n/a15
Dec ’24CA$17.74
CA$28.60
+61.2%
21.8%CA$42.00CA$15.00n/a15
Nov ’24CA$16.61
CA$28.60
+72.2%
21.8%CA$42.00CA$15.00CA$21.5115
Oct ’24CA$19.38
CA$31.54
+62.7%
15.6%CA$38.00CA$18.00CA$16.1314
Sep ’24CA$22.77
CA$30.93
+35.9%
17.0%CA$38.00CA$18.00CA$15.4415
Aug ’24CA$23.89
CA$29.74
+24.5%
17.4%CA$38.00CA$18.30CA$15.4615
Jul ’24CA$24.99
CA$29.14
+16.6%
18.4%CA$38.00CA$18.30CA$17.9015
Jun ’24CA$21.71
CA$29.52
+36.0%
16.4%CA$38.00CA$22.00CA$18.2015
May ’24CA$19.19
CA$26.72
+39.2%
15.2%CA$35.00CA$20.00CA$20.4615
Apr ’24CA$19.15
CA$26.65
+39.2%
15.4%CA$35.00CA$20.00CA$20.1215
Mar ’24CA$20.04
CA$27.08
+35.1%
17.8%CA$40.00CA$20.00CA$18.1215
Feb ’24CA$22.66
CA$27.69
+22.2%
17.0%CA$40.00CA$21.00CA$18.2516
Jan ’24CA$19.39
CA$27.06
+39.6%
17.2%CA$40.00CA$21.00CA$18.6916
Dec ’23CA$19.10
CA$27.00
+41.4%
17.1%CA$40.00CA$21.00CA$17.7416
Nov ’23CA$20.15
CA$26.88
+33.4%
17.4%CA$40.00CA$21.00CA$16.6116

Analyst Forecast: Target price is lower than the current share price.

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