AC CN

Air Canada Inc.

Industrial/Transportation


Presented:12/06/2019
Price:CA$49.03
Cap:$10.41B
Current Price:CA$17.23
Cap:$4.94B

Presented

Date12/06/2019
PriceCA$49.03
Market Cap$10.41B
Ent Value$12.02B
P/E Ratio12.02x
Book ValueCA$15.19
Div Yield0%
Shares O/S265.55M
Ave Daily Vol1,048,008
Short IntN/A

Current

PriceCA$17.23
Market Cap$4.94B
Air Canada provides airline transportation services. It engages in full-service airline, scheduled passenger and cargo services, serving more than two hundred airports on six continents. It operates flights in Canada, the USA, Latin America, Europe, Australia and Asia. The company was founded on April 11, 1936 and is headquartered in Saint-Laurent, Canada.

Publicly traded companies mentioned herein: Aimia Inc (AIM CN), Air Canada (AC CN), American Airlines Group Inc (AAL), Boeing Co/The (BA), Onex Corp (ONEX CN), Transat AT Inc (TRZ CN), WestJet Airlines Ltd (WJA)

Highlights

The presenter is long shares of Air Canada (AC CN), which has completed a successful turnaround. AC struggled for years due to several poor strategic moves, ultimately culminating in its 2003 bankruptcy. The company has been able to reverse these mistakes over time and investor sentiment has improved substantially, evidenced by the stock price roughly doubling this year. In his opinion, AC has fully recovered, as return metrics and KPIs are in line with its US airline peers. Still, shares trade at a discount to peers due to its problematic history; the presenter therefore considers the stock cheap at the current price of ~C$50 per share, targeting upside to C$80+ per share. He expects this price appreciation to occur on the back of investor sentiment continuing to improve, significant share buyback potential, a beneficial competitive landscape, and a multitude of catalysts that should provide upside to numbers in the coming years.

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Idea Discussion

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