Exchange Income (EIF) AI Stock Analysis

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Exchange Income

(TSX:EIF)

Rating:70Outperform

Price Target:

C$64.00

▲(10.25%Upside)

Exchange Income Corporation exhibits strong revenue growth and operational performance with strategic acquisitions supporting future expansion. While positive earnings call results and a high dividend yield bolster its investment appeal, high leverage, negative free cash flow, and overbought technical indicators suggest potential risks. The balanced investment case reflects these mixed elements.

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

Market Cap

C$2.97B

Dividend Yield4.57%

Average Volume (3M)98.00K

Price to Earnings (P/E)22.3

Beta (1Y)0.95

Revenue Growth5.95%

EPS Growth-1.42%

CountryCA

Employees3,934

SectorIndustrials

Sector Strength90

IndustryAirlines, Airports & Air Services

Share Statistics

EPS (TTM)0.28

Shares Outstanding51,384,563

10 Day Avg. Volume81,770

30 Day Avg. Volume98,004

Financial Highlights & Ratios

PEG Ratio0.47

Price to Book (P/B)2.44

Price to Sales (P/S)0.00

P/FCF Ratio-79.15

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

C$70.20

Price Target Upside20.93% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering5

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: 4.31%|

Next Earnings Date:Aug 07, 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 solid revenue growth with stable gross profit margins. However, high leverage and negative free cash flow pose potential risks, indicating a need for improved cash management and debt reduction.

Income Statement

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

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

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.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.73B	2.66B	2.50B	2.06B	1.41B	1.15B
	Gross Profit
681.19M	657.74M	594.49M	491.35M	334.45M	273.83M
	EBIT
323.99M	317.65M	289.70M	236.73M	149.50M	101.87M
	EBITDA
633.98M	616.26M	548.71M	449.60M	332.85M	276.78M
	Net Income Common Stockholders
123.91M	121.23M	122.31M	109.67M	68.59M	28.05M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
54.17M	71.80M	103.56M	139.90M	75.41M	69.86M
	Total Assets
4.61B	4.60B	4.08B	3.55B	2.59B	2.29B
	Total Debt
2.28B	2.33B	2.01B	1.78B	1.29B	1.21B
	Net Debt
2.23B	2.26B	1.90B	1.64B	1.21B	1.14B
	Total Liabilities
3.15B	3.19B	2.83B	2.53B	1.79B	1.61B
	Stockholders Equity
1.46B	1.41B	1.25B	1.02B	800.27M	685.95M
Cash Flow		Free Cash Flow
-125.18M	-133.38M	-152.61M	-31.46M	5.62M	113.72M
	Operating Cash Flow
395.41M	357.01M	353.23M	335.12M	285.05M	259.97M
	Investing Cash Flow
-591.75M	-567.54M	-650.75M	-655.45M	-357.94M	-196.28M
	Financing Cash Flow
198.78M	176.33M	261.35M	380.97M	79.42M	-15.15M

Exchange Income Technical Analysis

Technical Analysis Sentiment

Positive

Last Price58.05

Price Trends

50DMA

53.22

Positive

100DMA

52.28

Positive

200DMA

52.52

Positive

Market Momentum

MACD

1.09

Positive

RSI

67.70

Neutral

STOCH

72.67

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 58.05 is above the 20-day moving average (MA) of 57.31, above the 50-day MA of 53.22, and above the 200-day MA of 52.52, indicating a bullish trend. The MACD of 1.09 indicates Positive momentum. The RSI at 67.70 is Neutral, neither overbought nor oversold. The STOCH value of 72.67 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 (66)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MDA	80 Outperform	C$3.54B	36.30	8.54%	―	49.98%	108.76%
AC	73 Outperform	$6.75B	4.00	132.28%	―	0.24%	-23.10%
EIF	70 Outperform	C$2.97B	22.35	9.16%	4.57%	5.95%	-1.42%
BBU.UN	67 Neutral	C$3.07B	2.83	-1.19%	1.00%	-27.79%	-106.03%
Sector *	66 Neutral	$4.52B	12.34	5.41%	3.62%	4.15%	-12.18%
CHR	52 Neutral	C$555.74M	―	-0.09%	―	-17.58%	-703.93%
JET	48 Neutral	$69.11M	―		―	34.32%	77.15%

* Industrials Sector Average

Performance Comparison

TSE:EIF

Exchange Income

57.26

16.11

39.15%

TSE:BBU.UN

Brookfield Business Partners

34.00

7.98

30.69%

TSE:JET

Global Crossing Airlines

1.36

0.00

0.00%

TSE:AC

Air Canada

18.77

1.61

9.38%

TSE:CHR

Chorus Aviation

20.61

5.35

35.06%

TSE:MDA

MDA Ltd

29.51

17.40

143.68%

Exchange Income Corporate Events

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.

DividendsBusiness Operations and Strategy

Exchange Income Corporation Declares April 2025 Dividend

Positive

Apr 17, 2025

Exchange Income Corporation announced a dividend of $0.22 per share for April 2025, payable on May 15, 2025, with shareholders having the option to reinvest through the company’s dividend reinvestment plan. This announcement reflects the company’s ongoing commitment to providing shareholder value and leveraging its diversified business model in aerospace, aviation, and manufacturing sectors.

Financial Disclosures

Exchange Income Corporation Schedules Q1 2025 Financial Results Call

Positive

Apr 8, 2025

Exchange Income Corporation announced it will host a conference call on May 13, 2025, to discuss its first quarter financial results, which will be released on May 12, 2025. This announcement highlights the company’s commitment to transparency and stakeholder engagement, potentially impacting its market position positively by keeping investors informed.

Dividends

Exchange Income Corporation Declares March 2025 Dividend

Positive

Mar 17, 2025

Exchange Income Corporation announced a dividend of $0.22 per share for March 2025, payable on April 15, 2025. This dividend is classified as ‘eligible’ under Canadian tax law, potentially offering enhanced tax credits for Canadian residents. The announcement reflects the company’s ongoing commitment to providing shareholder value and may positively impact its market position by reinforcing investor confidence.

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.