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Exchange Income Corp (TSE:EIF)
TSX:EIF
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Exchange Income (EIF) AI Stock Analysis

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TSE:EIF

Exchange Income

(TSX:EIF)

Rating:78Outperform
Price Target:
C$75.00
▲(13.64%Upside)
Exchange Income Corporation scores highly due to its robust financial performance, positive earnings outlook, and strategic corporate events. The company's growth initiatives and expanded credit facility bolster its long-term prospects. However, high leverage and valuation concerns slightly temper the overall positive outlook.
Positive Factors
Contract Agreement
EIC has signed a 10-year agreement with the Government of Nunavut, bringing better revenue and margin visibility to its work.
Dividend Growth
Dividend compounding has historically driven above market returns, with EIC's dividend growing at 4-5% CAGR and yielding around 4%.
Negative Factors
Economic Value Creation
With a limited spread between ROIC and WACC, and regular use of equity financing, per share economic value creation is challenged.
Valuation Risks
The risk exists that valuation could pull back with EIC currently trading about 5 times above its pre-COVID average relative to the TSX.

Exchange Income (EIF) vs. iShares MSCI Canada ETF (EWC)

Exchange Income Business Overview & Revenue Model

Company DescriptionExchange Income Corporation (EIF) is a diversified, acquisition-oriented company focused on opportunities in aviation and manufacturing sectors. The company acquires and grows businesses in these industries, leveraging its expertise to enhance their operations and profitability. Key segments include regional aviation services, aerospace products, and manufacturing operations across various sectors.
How the Company Makes MoneyExchange Income Corporation generates revenue through its diverse portfolio of subsidiary businesses. In the aviation sector, it earns money from passenger and cargo transportation services, aircraft leasing, and maintenance operations. The manufacturing segment contributes through the production and sale of specialized products, including precision parts and innovative solutions for various industries. The company's growth strategy involves acquiring businesses with strong cash flows and potential for operational improvements, which are then integrated into its existing operations to achieve synergies and enhanced profitability. Strategic partnerships and long-term contracts with clients also play a crucial role in ensuring stable and recurring revenue streams.

Exchange Income Earnings Call Summary

Earnings Call Date:May 12, 2025
(Q1-2025)
|
% Change Since: 19.03%|
Next Earnings Date:Aug 11, 2025
Earnings Call Sentiment Positive
The earnings call presented a positive outlook with record-breaking performance and strategic achievements such as the expanded credit facility. However, challenges were acknowledged in the Aerospace business line and foreign exchange uncertainties. The company remains confident in its guidance and growth prospects.
Q1-2025 Updates
Positive Updates
Record-Breaking First Quarter Metrics
First quarter high watermarks were set for revenue at $668 million, adjusted EBITDA at $130 million, free cash flow at $81 million, and free cash flow less maintenance CapEx at $26 million.
Strong Performance in Aerospace & Aviation
Revenue in the Aerospace & Aviation segment increased by $14 million or 4% to $382 million, with adjusted EBITDA increasing by $8 million or 8% to $102 million, driven by Essential Air Services and Aircraft Sales and Leasing business lines.
Manufacturing Segment Growth
Revenue in the Manufacturing segment rose by $53 million or 23% to $286 million, with adjusted EBITDA increasing by $14 million or 50% to $41 million, primarily driven by the acquisition of Spartan and increased demand for composite mats.
Amendment to Credit Facility
The credit facility was increased to $3 billion from $2.2 billion, with maturity extended to April 30, 2029, providing over $1 billion in available liquidity for future acquisitions or growth capital expenditures.
Negative Updates
Challenges in Aerospace Business Line
Revenues and adjusted EBITDA within the Aerospace business line were lower due to the planned wind down of certain training programs and changes in contract agreements, resulting in more variability.
Decline in Multi-Story Window Solutions
The Multi-Story Window Solutions business line experienced decreased revenue and adjusted EBITDA due to project delays and gaps in production, impacted by tariffs and rationalized manufacturing footprint.
Foreign Exchange and Tariff Uncertainties
The company faced foreign exchange volatility and uncertainty due to changing trade policies with the U.S., affecting business sentiment and conversion of inquiries to orders.
Company Guidance
During the conference call for Exchange Income Corporation's first quarter of fiscal year 2025, the company reaffirmed its fiscal year adjusted EBITDA guidance of $690 million to $730 million, excluding Canadian North's financial results. The call highlighted record first-quarter performance across several key metrics: revenue reached $668 million, adjusted EBITDA was $130 million, free cash flow stood at $81 million, and free cash flow less maintenance CapEx was $26 million. The company announced an increase in its credit facility to $3 billion, extending the maturity to 2029, enhancing liquidity for strategic acquisitions and growth investments. Manufacturing segment revenue rose by 23% to $286 million, with adjusted EBITDA increasing by 50% to $41 million, driven by strong demand in the Environmental Access Solutions business line. Despite uncertainty in trade policy and geopolitical risks, EIC maintained its resilience and stability, attributing its confidence to the essential nature of its subsidiaries' goods and services.

Exchange Income Financial Statement Overview

Summary
Exchange Income has shown strong revenue growth and operational efficiency, with stable gross profit margins. However, high leverage and negative free cash flow pose financial risks. Improvement in net profit margins and debt reduction could strengthen financial stability.
Income Statement
78
Positive
The company has demonstrated solid revenue growth with a significant increase from $1.14 billion in 2020 to $2.73 billion in TTM, indicating robust demand in the airline industry. Gross profit margins have remained stable around 25%, suggesting effective cost management. However, net profit margin is relatively low at 4.5% for TTM, highlighting potential areas for efficiency improvements. EBIT and EBITDA margins are healthy, reflecting strong operational performance.
Balance Sheet
72
Positive
The balance sheet portrays a mixed picture with a substantial debt-to-equity ratio of 1.56 in TTM, indicating high leverage which could pose risks during economic downturns. Nevertheless, the return on equity (ROE) is commendable at 8.47%, demonstrating effective use of equity capital. The equity ratio is moderate at 31.77%, suggesting a balanced asset financing strategy.
Cash Flow
65
Positive
The cash flow statement reveals challenges with consistent negative free cash flow in recent periods, highlighting high capital expenditures. Despite this, operating cash flow remains strong, with a favorable operating cash flow to net income ratio of 3.19 in TTM, indicating healthy operational efficiency. However, the free cash flow to net income ratio is negative, pointing to potential cash strain.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.66B2.50B2.06B1.41B1.15B
Gross Profit657.74M594.49M491.35M334.45M273.83M
EBITDA616.26M548.71M449.60M332.85M276.78M
Net Income121.23M122.31M109.67M68.59M28.05M
Balance Sheet
Total Assets4.60B4.08B3.55B2.59B2.29B
Cash, Cash Equivalents and Short-Term Investments71.80M103.56M139.90M75.41M69.86M
Total Debt2.33B2.01B1.78B1.29B1.21B
Total Liabilities3.19B2.83B2.53B1.79B1.61B
Stockholders Equity1.41B1.25B1.02B800.27M685.95M
Cash Flow
Free Cash Flow-133.38M-152.61M-31.46M5.62M113.72M
Operating Cash Flow357.01M353.23M335.12M285.05M259.97M
Investing Cash Flow-567.54M-650.75M-655.45M-357.94M-196.28M
Financing Cash Flow176.33M261.35M380.97M79.42M-15.15M

Exchange Income Technical Analysis

Technical Analysis Sentiment
Positive
Last Price66.00
Price Trends
50DMA
60.71
Positive
100DMA
55.36
Positive
200DMA
54.51
Positive
Market Momentum
MACD
1.66
Positive
RSI
66.74
Neutral
STOCH
45.81
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:EIF, the sentiment is Positive. The current price of 66 is above the 20-day moving average (MA) of 65.52, above the 50-day MA of 60.71, and above the 200-day MA of 54.51, indicating a bullish trend. The MACD of 1.66 indicates Positive momentum. The RSI at 66.74 is Neutral, neither overbought nor oversold. The STOCH value of 45.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:EIF.

Exchange Income Peers Comparison

Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
C$3.40B25.519.16%4.12%5.95%-1.42%
77
Outperform
$7.09B4.67132.28%0.24%-23.10%
74
Outperform
C$5.05B50.498.54%49.98%108.76%
67
Neutral
C$3.16B2.83-1.19%0.02%-27.79%-106.03%
59
Neutral
C$583.20M-0.09%-17.58%-703.93%
59
Neutral
AU$1.65B10.0711.24%3.41%6.92%3.55%
48
Neutral
C$69.11M
34.32%77.15%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:EIF
Exchange Income
66.00
19.35
41.48%
TSE:BBU.UN
Brookfield Business Partners
35.34
7.36
26.29%
TSE:JET
Global Crossing Airlines
1.36
0.00
0.00%
TSE:AC
Air Canada
21.98
5.84
36.18%
TSE:CHR
Chorus Aviation
22.56
2.89
14.69%
TSE:MDA
MDA Ltd
41.04
27.93
213.04%

Exchange Income Corporate Events

DividendsBusiness Operations and Strategy
Exchange Income Corporation Declares July 2025 Dividend
Positive
Jul 17, 2025

Exchange Income Corporation has announced a dividend of $0.22 per share for July 2025, payable on August 15, 2025, to shareholders of record as of July 31, 2025. This dividend is designated as an ‘eligible’ dividend under Canadian tax legislation, potentially offering enhanced tax credits to Canadian residents. This announcement reflects the company’s ongoing commitment to providing shareholder value and maintaining its financial health, which is crucial for its strategic positioning in the aerospace, aviation, and manufacturing sectors.

The most recent analyst rating on (TSE:EIF) stock is a Hold with a C$59.00 price target. To see the full list of analyst forecasts on Exchange Income stock, see the TSE:EIF Stock Forecast page.

Business Operations and Strategy
Exchange Income Corporation Secures Long-Term Air Service Agreement with Nunavut
Positive
Jul 16, 2025

Exchange Income Corporation has entered into a long-term air service agreement with the Government of Nunavut through its subsidiaries Calm Air International and Canadian North. This agreement, which spans 10 years with an option to extend for an additional 5 years, aims to provide medical travel, family services travel, duty travel, and air freight services across Nunavut. The agreement signifies a strong partnership between EIC and the Government of Nunavut, with EIC granting the government an option to purchase a significant minority stake in Canadian North. This collaboration is expected to bring stability to EIC’s operations in the region, allowing continued investment in community infrastructure and initiatives.

The most recent analyst rating on (TSE:EIF) stock is a Hold with a C$59.00 price target. To see the full list of analyst forecasts on Exchange Income stock, see the TSE:EIF Stock Forecast page.

Financial Disclosures
Exchange Income Corporation Schedules Q2 2025 Results Conference Call
Neutral
Jul 7, 2025

Exchange Income Corporation announced it will host a conference call on August 12, 2025, to discuss its second quarter financial results, which are expected to be released on August 11, 2025. This announcement underscores the company’s commitment to transparency and engagement with stakeholders, potentially impacting its market position and investor relations.

The most recent analyst rating on (TSE:EIF) stock is a Buy with a C$72.00 price target. To see the full list of analyst forecasts on Exchange Income stock, see the TSE:EIF Stock Forecast page.

M&A TransactionsBusiness Operations and Strategy
Exchange Income Corporation Expands Indigenous Pilot Program in Nunavut
Positive
Jul 3, 2025

Exchange Income Corporation has announced its commitment to double the capacity of the Atik Mason Indigenous Pilot Pathway in Nunavut for 2026. This expansion follows the acquisition of Canadian North and aims to remove barriers to flight training for Indigenous students, while investing in the communities and future pilots in the region.

The most recent analyst rating on (TSE:EIF) stock is a Buy with a C$72.00 price target. To see the full list of analyst forecasts on Exchange Income stock, see the TSE:EIF Stock Forecast page.

M&A TransactionsBusiness Operations and Strategy
Exchange Income Corporation Expands Northern Reach with Canadian North Acquisition
Positive
Jul 2, 2025

Exchange Income Corporation has completed the acquisition of Canadian North, a Northern airline operating in the Canadian Arctic, for $205 million. This acquisition allows EIC to expand its aviation services to all regions in the far north, enhancing its market presence and providing stable and efficient service to remote communities. The acquisition is expected to improve EIC’s operational scope and efficiency, with targeted returns on capital anticipated by the end of the second year.

The most recent analyst rating on (TSE:EIF) stock is a Buy with a C$72.00 price target. To see the full list of analyst forecasts on Exchange Income stock, see the TSE:EIF Stock Forecast page.

Dividends
Exchange Income Corporation Declares June 2025 Dividend
Positive
Jun 17, 2025

Exchange Income Corporation announced a dividend of $0.22 per share for June 2025, payable on July 15, 2025, to shareholders of record as of June 30, 2025. This dividend is designated as an ‘eligible’ dividend under Canadian tax law, potentially offering enhanced tax credits to Canadian residents. The announcement underscores the company’s commitment to providing shareholder value and reflects its stable financial performance in its niche markets.

The most recent analyst rating on (TSE:EIF) stock is a Buy with a C$72.00 price target. To see the full list of analyst forecasts on Exchange Income stock, see the TSE:EIF Stock Forecast page.

Dividends
Exchange Income Corporation Declares May 2025 Dividend
Positive
May 16, 2025

Exchange Income Corporation announced a dividend of $0.22 per share for May 2025, payable on June 13, 2025, to shareholders of record as of May 30, 2025. This announcement reflects the company’s ongoing commitment to providing shareholder value and reinforces its stable financial position in the aerospace, aviation, and manufacturing sectors.

The most recent analyst rating on (TSE:EIF) stock is a Buy with a C$72.00 price target. To see the full list of analyst forecasts on Exchange Income stock, see the TSE:EIF Stock Forecast page.

Shareholder MeetingsBusiness Operations and Strategy
Exchange Income Corporation Reports 2025 AGM Voting Results
Positive
May 15, 2025

Exchange Income Corporation announced the results of its 2025 Annual General Meeting, where shareholders approved all items of business, including the election of directors and the reappointment of PricewaterhouseCoopers LLP as the auditor. The corporation’s approach to executive compensation was also endorsed. This outcome reflects strong shareholder support and is likely to reinforce the company’s stability and strategic direction in its core sectors.

The most recent analyst rating on (TSE:EIF) stock is a Buy with a C$72.00 price target. To see the full list of analyst forecasts on Exchange Income stock, see the TSE:EIF Stock Forecast page.

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Exchange Income Corporation Achieves Record Q1 Results and Expands Portfolio
Positive
May 12, 2025

Exchange Income Corporation reported record financial results for the first quarter of 2025, with significant increases in revenue, adjusted EBITDA, and free cash flow. The company continues to demonstrate resilience and growth despite economic uncertainties, driven by strategic investments and acquisitions, including the binding purchase agreement for Canadian North. These developments are expected to enhance the company’s market position and profitability, particularly in the Aerospace & Aviation segment.

The most recent analyst rating on (TSE:EIF) stock is a Buy with a C$72.00 price target. To see the full list of analyst forecasts on Exchange Income stock, see the TSE:EIF Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
Exchange Income Corporation Expands Credit Facility to $3 Billion, Extending Maturity to 2029
Positive
Apr 29, 2025

Exchange Income Corporation announced an increase and extension of its credit facility to $3.0 billion, maturing in 2029, which includes a significant allocation to its Canadian Head Office and a social loan tranche. This financial enhancement, achieved with consistent pricing and terms, strengthens the company’s liquidity, enabling it to pursue strategic growth investments and acquisitions, while maintaining its conservative approach to debt and leverage.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 18, 2025