I have been holding AC for about 6 years, It's been going up and down, now with a little bit 14% gain in total. It is going to report earnings on the 13th. What is your view of its earnings this time? Should I hold on to this stock or move to some more promising ones?
Thanks a lot!
EPS of 65c beat estimates of 30c; revenue of $5.77B beat estimates of $5.51B. Air Canada's adjusted Ebitda climbed 25% vs. 4Q24 to C$867 million, beating consensus' C$757 million, as margin grew 210 bps to 15%. Fuel, capacity growth and higher load factors offset higher costs. These trends could persist, but Ebitda could grow 17% vs. 1Q25 to C$455 million as margin increases 100 bps to 8.4%. Revenue rose 7%, to C$5.8 billion, with Atlantic routes accounting for 50% of the gain. Capacity was up 3.4% and can expand 3.2% in 1Q. Demand is robust as yields slid 0.6%, but load factor climbed 240 bps to 84.8%, led by domestic and Atlantic routes. Jet fuel price fell 3%, aided by a C$17 million hedging gain. Other adjusted unit costs rose 2% on aircraft and passenger costs, and may advance 2% in 1Q. Adjusted net income doubled to C$201 million. Results were good, and the stock is benefiting from NOT being connected to the AI scare. We do not think any airline should be held long term, but with decent results and a low valuation, AC looks better than usual in the current market. It does of course remain cyclical, but if an investor has held six years we would be OK holding longer.