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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:74Outperform
Price Target:
C$81.00
▲(13.52% Upside)
Exchange Income's strong technical momentum and positive earnings call outlook are the primary drivers of its score. While financial performance shows growth, high leverage and cash flow issues are concerns. The stock's valuation is relatively high, but the dividend yield offers some compensation.
Positive Factors
Acquisition Impact
The Canadian North acquisition has led to a 5% increase in EBITDA guidance, reflecting potential in northern Canada and Aerospace/ISR momentum.
Revenue Visibility
EIC has signed a 10-year agreement with the Government of Nunavut, bringing better revenue and margin visibility to its work.
Negative Factors
Economic Value Creation
There is a limited spread between ROIC and WACC, affecting per share economic value creation.
Valuation Concerns
There is caution on valuation with shares trading at record P/E levels when considering the cost of financing.
Valuation Risks
The risk is that valuation pulls back with EIC currently trading approximately 5x 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 engages in aerospace and aviation services and equipment, and manufacturing businesses worldwide. It operates in two segments, Aerospace & Aviation, and Manufacturing. The Aerospace & Aviation segment offers scheduled airline, cargo, charter, and emergency medical services to communities located in Manitoba, Ontario, Nunavut, British Columbia, and Alberta, as well as Newfoundland and Labrador, Québec, New Brunswick, and Nova Scotia. It also provides after-market aircraft, engines, and component parts to regional airline operators; designs, modifies, maintains, and operates custom sensor-equipped aircraft; and offers maritime surveillance and support services in Canada, the Caribbean, and the Middle East. In addition, this segment provides pilot flight training services. The Manufacturing segment manufactures window wall systems primarily used in high-rise multi-family residential projects; stainless steel tanks, vessels, and processing equipment; heavy-duty pressure washing and steam systems, commercial water recycling systems, and custom tanks for the transportation of various products, primarily oil, gasoline, and water products; precision parts and components primarily used in the aerospace, defense, healthcare, and security sectors; electrical and control systems integrator focused on the agricultural material handling; and precision sheet metal and tubular products. This segment also focuses on the engineering, design, manufacture, and construction of communication infrastructure, as well as wireless and wireline construction and maintenance services; and provision of technical services. Exchange Income Corporation is headquartered in Winnipeg, Canada.
How the Company Makes MoneyExchange Income Corporation generates revenue primarily through its two main business segments: Aviation and Manufacturing. In the Aviation segment, income is derived from passenger and cargo air transportation services, including scheduled flights, charters, and medevac services. This segment also benefits from government contracts and partnerships with indigenous communities in Canada, providing essential air services to remote areas. The Manufacturing segment contributes to revenue through the production and sale of precision manufacturing products, including metal fabrication, industrial components, and communication systems. The company’s diversified business model, strategic acquisitions, and focus on essential services in niche markets play a significant role in its ability to generate consistent revenue.

Exchange Income Earnings Call Summary

Earnings Call Date:Aug 11, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong financial performance with record-breaking revenue and strategic growth through the acquisition of Canadian North. However, external challenges like aluminum tariffs and forest fires have posed short-term operational challenges. Overall, the positive elements significantly outweigh the negatives, pointing to a promising future outlook.
Q2-2025 Updates
Positive Updates
Record-Breaking Revenue
Revenues of $720 million were the highest achieved in any quarter in the company's history.
Strategic Acquisition of Canadian North
Closed the acquisition of Canadian North, expected to enhance EIC's strategic positioning in the market.
Increased EBITDA Guidance
Updated 2025 EBITDA guidance to $725 million to $765 million, reflecting the inclusion of Canadian North's results.
Significant Contract Wins
Secured a long-term air services agreement with the government of Nunavut, providing exclusive service in the region.
Strong Financial Performance
Adjusted EBITDA of $177 million, free cash flow of $123 million, net earnings of $40 million, and adjusted net earnings of $47 million, all setting second quarter records.
Robust Manufacturing Demand
Manufacturing segment revenue increased by $31 million or 13% to $265 million, driven by strong demand for composite mats.
Significant New Bookings
The multistory window solutions business line booked approximately $100 million in new projects post-quarter.
Negative Updates
Impact of Aluminum Tariffs
Multistory window solutions business negatively impacted by aluminum tariffs, offsetting productivity and profitability gains.
Forest Fires Disruption
Forest fires across Canada led to temporary displacement of northern communities, impacting scheduled service and medevac operations.
Maintenance CapEx Increase
Higher-than-normal maintenance CapEx expected in the short term due to Canadian North acquisition.
Company Guidance
During the Exchange Income Corporation's conference call on August 11, 2025, the management highlighted their record-breaking financial performance in the second quarter of 2025. Key metrics included a revenue of $720 million, adjusted EBITDA of $177 million, free cash flow of $123 million, net earnings of $40 million, and adjusted net earnings of $47 million. The company also updated its 2025 EBITDA guidance, raising the range to $725 million to $765 million, factoring in the recent acquisition of Canadian North. This acquisition, along with a new long-term services agreement with the government of Nunavut, is expected to enhance the company's strategic position and drive growth. Despite challenges such as geopolitical uncertainties and tariffs impacting their multistory window solutions business, the company remains optimistic about their diversified operations and future prospects, with plans for further investments and potential expansion in various sectors.

Exchange Income Financial Statement Overview

Summary
Exchange Income demonstrates strong revenue growth and operational efficiency, with robust EBIT and EBITDA margins. However, high leverage and negative free cash flow present risks. Improving net profit margins and reducing debt levels could enhance 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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.79B2.66B2.50B2.06B1.41B1.15B
Gross Profit705.00M657.74M594.49M491.35M334.45M273.83M
EBITDA652.68M616.26M548.71M449.60M332.85M276.78M
Net Income131.28M121.23M122.31M109.67M68.59M28.05M
Balance Sheet
Total Assets4.77B4.60B4.08B3.55B2.59B2.29B
Cash, Cash Equivalents and Short-Term Investments230.79M71.80M103.56M139.90M75.41M69.86M
Total Debt2.46B2.33B2.01B1.78B1.29B1.21B
Total Liabilities3.33B3.19B2.83B2.53B1.79B1.61B
Stockholders Equity1.45B1.41B1.25B1.02B800.27M685.95M
Cash Flow
Free Cash Flow-60.06M-133.38M-152.61M-31.46M5.62M113.72M
Operating Cash Flow447.63M357.01M353.23M335.12M285.05M259.97M
Investing Cash Flow-562.40M-567.54M-650.75M-655.45M-357.94M-196.28M
Financing Cash Flow300.29M176.33M261.35M380.97M79.42M-15.15M

Exchange Income Technical Analysis

Technical Analysis Sentiment
Positive
Last Price71.35
Price Trends
50DMA
67.80
Positive
100DMA
61.04
Positive
200DMA
56.58
Positive
Market Momentum
MACD
1.15
Positive
RSI
56.06
Neutral
STOCH
26.09
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 71.35 is below the 20-day moving average (MA) of 71.96, above the 50-day MA of 67.80, and above the 200-day MA of 56.58, indicating a neutral trend. The MACD of 1.15 indicates Positive momentum. The RSI at 56.06 is Neutral, neither overbought nor oversold. The STOCH value of 26.09 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 (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
C$3.66B26.499.71%3.81%6.87%8.42%
64
Neutral
$10.73B15.747.56%2.01%2.76%-15.10%
$49.95M
$4.08B4.51101.32%
50
Neutral
C$517.59M2.81%0.39%-16.92%77.04%
$2.43B2.67-0.29%0.91%
79
Outperform
C$5.52B46.929.64%57.21%136.79%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:EIF
Exchange Income
71.35
24.88
53.54%
JETMF
Global Crossing Airlines
0.66
0.13
24.53%
ACDVF
Air Canada
13.86
2.74
24.64%
TSE:CHR
Chorus Aviation
20.33
1.85
10.01%
BBU
Brookfield Business Partners
27.35
7.90
40.62%
TSE:MDA
MDA Space Ltd
44.01
28.69
187.27%

Exchange Income Corporate Events

Dividends
Exchange Income Corporation Declares August 2025 Dividend
Positive
Aug 15, 2025

Exchange Income Corporation announced a dividend of $0.22 per share for August 2025, payable on September 15, 2025, to shareholders of record as of August 29, 2025. This announcement reflects the company’s ongoing commitment to providing shareholder value and may enhance investor confidence through the eligibility for enhanced dividend tax credits under Canadian law.

The most recent analyst rating on (TSE:EIF) stock is a Buy with a C$85.00 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 Q2 Results and Expands Northern Operations
Positive
Aug 11, 2025

Exchange Income Corporation reported record financial results for the second quarter of 2025, with revenue reaching $720 million, a 9% increase from the previous year. The company also announced the completion of its acquisition of Canadian North and a significant ten-year Air Services Agreement with the Government of Nunavut, highlighting its strategic expansion in Northern Canada. This acquisition and agreement are expected to bolster EIC’s capabilities in the region, aligning with Canadian government strategies for economic development and sovereignty in the Arctic.

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.

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.

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: Aug 20, 2025