Air Canada: Strong Strategic Direction and Financial Outlook Justify Buy Rating

BMO Capital analyst Fadi Chamoun maintained a Buy rating on Air Canada (ACDVF – Research Report) yesterday and set a price target of C$29.00.

Fadi Chamoun has given his Buy rating due to a combination of factors that reinforce confidence in Air Canada’s strategic direction and financial outlook. Following discussions with Air Canada’s senior management, Chamoun noted that the company is executing well on its near-term bookings, which are solid, and is on track to achieve its medium-term growth targets. This is expected to result in structurally higher free cash flow and increased shareholder distributions.
Chamoun’s rating is also supported by Air Canada’s strong EBITDA projections, with estimates for 2025 remaining robust at approximately $3.5 billion, slightly above the midpoint of the company’s guidance. Additionally, the company’s focus on optimizing its network and leveraging growth opportunities, such as expanding premium seating and exploring new routes, is anticipated to drive margin expansion and improve free cash flow over the coming years. These factors collectively underpin Chamoun’s positive outlook and Buy rating for Air Canada’s stock.

In another report released on May 21, Stifel Nicolaus also maintained a Buy rating on the stock with a C$23.00 price target.