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Transcontinental (TSE:TCL.A)
TSX:TCL.A
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Transcontinental (TCL.A) AI Stock Analysis

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TSE:TCL.A

Transcontinental

(TSX:TCL.A)

Rating:68Neutral
Price Target:
C$21.50
▲(6.07% Upside)
Transcontinental's overall stock score is supported by a strong valuation with a low P/E ratio and high dividend yield, making it attractive for value and income investors. Financial performance is stable, with efficient cost management and improving returns, though revenue growth remains a concern. Technical analysis presents mixed signals, with potential long-term strength but short-term bearish momentum. The earnings call highlights growth in certain sectors but also ongoing challenges, particularly in the Packaging and Media sectors.
Positive Factors
Business Diversification
The company has taken meaningful steps to diversify its business away from declining printing markets.
Financial Performance
The company declared a special dividend of $1/share, reflecting positive financial performance.
Retail Services & Printing Growth
Retail Services & Printing adjusted EBITDA was above forecast, with lower volumes more than offset by cost reductions.
Negative Factors
Declining Demand Trends
Approximately 25-35% of EBITDA is still tied to markets with declining demand trends.
Packaging Segment Performance
Packaging adjusted EBITDA was slightly below forecast, with lower volumes partially offset by cost reductions.

Transcontinental (TCL.A) vs. iShares MSCI Canada ETF (EWC)

Transcontinental Business Overview & Revenue Model

Company DescriptionTranscontinental Inc. (TCL.A) is a leading Canadian company operating in the printing, flexible packaging, and media sectors. The company is known for its comprehensive range of printing services, including magazine, newspaper, and marketing materials, as well as its innovative packaging solutions that serve diverse industries such as food, beverage, and consumer goods. Additionally, Transcontinental owns a portfolio of media properties, offering digital and print content across various platforms.
How the Company Makes MoneyTranscontinental Inc. generates revenue through three primary segments: printing, packaging, and media. The printing segment is a significant contributor, providing services to publishers, retailers, and marketers, leveraging high-volume capabilities to produce newspapers, magazines, and marketing collateral. The flexible packaging segment is another vital revenue stream, where the company designs and manufactures packaging solutions for consumer products, focusing on sustainability and innovation to meet client needs. The media segment, although a smaller portion of the business, still contributes by monetizing content through advertising, subscriptions, and events. Strategic acquisitions and partnerships in both the printing and packaging sectors have bolstered Transcontinental's market position and expanded its client base, further driving revenue growth.

Transcontinental Earnings Call Summary

Earnings Call Date:Sep 04, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Dec 10, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed performance with notable achievements in safety and the Retail Services & Printing sector. However, challenges persist in the Packaging sector and Latin America, along with a decline in the Media sector.
Q2-2025 Updates
Positive Updates
Improvement in Adjusted Net Earnings
The company reported an 11.5% growth in adjusted net earnings per share for Q2 compared to the same quarter last year.
Safety Improvements
A significant improvement in safety was reported, with incidents decreasing from 46 to 28, marking a 40% decrease year-over-year.
Retail Services & Printing Sector Growth
The Retail Services & Printing sector experienced a 5.1% increase in revenues, driven by growth in Book Printing, Specialty Solutions, and In-store Marketing activities.
Decrease in Financial Expenses
Financial expenses decreased by $5.4 million to $9 million, mainly due to lower debt levels and reduced interest rates.
Negative Updates
Decline in Packaging Sector Revenue
Packaging sector revenues decreased by 2% compared to last year, mainly due to the sale of industrial activities and lower volumes across most markets.
Challenges in Latin America
The company reported lower sales in Latin America due to weaker crop production and electricity shortages in Ecuador.
Media Sector Decline
The Media sector saw a decrease in revenues and profitability, mainly due to the end of the SEAO contract last year.
Company Guidance
In the TC Transcontinental Second Quarter Fiscal Year 2025 Results Conference Call, the company reported an 11.5% increase in adjusted net earnings per share compared to the same quarter last year. Adjusted EBITDA was strong at $108.5 million, driven by a 5.1% revenue increase in the Retail Services & Printing sector. The packaging sector, however, saw a 2% revenue decrease, primarily due to the sale of industrial activities and lower volumes. The company's financial position remains healthy with a net debt ratio of 1.70x, and they expect continued volume and profit growth in the second half of the fiscal year, particularly in the medical and retail sectors. Safety improvements were also noted, with a 40% reduction in incidents year-over-year.

Transcontinental Financial Statement Overview

Summary
Transcontinental's financials reflect stable profitability and efficient cost management. Strong equity position and improving return on equity indicate financial stability, although revenue growth remains a concern.
Income Statement
65
Positive
Transcontinental's income statement shows a stable gross profit margin of approximately 50% over the TTM, indicating efficient cost management. However, the net profit margin is modest at 6.5% for the TTM, slightly improved from 4.3% annually. Revenue has experienced slight fluctuations, with a recent annual decline but stable TTM figures. EBIT and EBITDA margins are stable, suggesting consistent operating efficiency. While profitability is stable, the lack of significant revenue growth is a concern.
Balance Sheet
70
Positive
The balance sheet indicates a strong equity position with a debt-to-equity ratio of 0.45 in the TTM, reflecting moderate leverage. The return on equity is improving, at 9.7% for the TTM, up from 6.4% annually, showing better profitability relative to equity. The equity ratio is robust at 56.7%, indicating a solid asset base funded by equity. The company is financially stable with manageable debt levels and improving returns.
Cash Flow
68
Positive
Cash flow analysis reveals a stable free cash flow position with a minor decline in the TTM. The operating cash flow to net income ratio is strong at 2.1, indicating efficient cash conversion. However, the free cash flow to net income ratio is slightly lower at 1.6, suggesting capital expenditure demands. Overall, the cash flow position is stable but reflects the need for ongoing investment.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.81B2.94B2.96B2.64B2.57B
Gross Profit1.38B1.36B1.32B1.25B1.25B
EBITDA416.30M391.70M447.50M450.00M482.10M
Net Income121.30M85.80M141.20M130.60M131.70M
Balance Sheet
Total Assets3.64B3.70B3.80B3.61B3.60B
Cash, Cash Equivalents and Short-Term Investments185.20M137.00M45.70M231.10M241.00M
Total Debt989.00M1.06B1.15B1.13B1.17B
Total Liabilities1.73B1.79B1.92B1.85B1.86B
Stockholders Equity1.91B1.90B1.88B1.76B1.73B
Cash Flow
Free Cash Flow292.20M294.80M78.40M177.00M329.50M
Operating Cash Flow413.70M472.30M220.80M315.30M427.00M
Investing Cash Flow-112.60M-165.20M-257.40M-181.00M126.40M
Financing Cash Flow-258.00M-216.30M-150.90M-150.10M-526.40M

Transcontinental Technical Analysis

Technical Analysis Sentiment
Positive
Last Price20.27
Price Trends
50DMA
20.10
Positive
100DMA
19.87
Positive
200DMA
18.16
Positive
Market Momentum
MACD
0.10
Negative
RSI
57.18
Neutral
STOCH
80.07
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TCL.A, the sentiment is Positive. The current price of 20.27 is above the 20-day moving average (MA) of 19.86, above the 50-day MA of 20.10, and above the 200-day MA of 18.16, indicating a bullish trend. The MACD of 0.10 indicates Negative momentum. The RSI at 57.18 is Neutral, neither overbought nor oversold. The STOCH value of 80.07 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:TCL.A.

Transcontinental Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
68
Neutral
C$1.69B9.499.65%9.29%-2.58%100.21%
66
Neutral
C$582.52M13,697.30-0.21%2.20%1.44%-103.80%
63
Neutral
C$636.64M18.657.32%-0.87%117.78%
61
Neutral
$17.96B13.14-5.36%3.00%1.25%-13.95%
49
Neutral
C$82.96M12.1017.74%3.45%-8.92%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:TCL.A
Transcontinental
20.46
5.04
32.68%
TSE:CGY
Calian Group
52.08
9.08
21.12%
TSE:DCM
Data Commun Management
1.46
-1.13
-43.63%
TSE:GDI
GDI Integrated
27.36
-8.74
-24.21%

Transcontinental Corporate Events

M&A TransactionsBusiness Operations and Strategy
TC Transcontinental Expands In-Store Marketing Segment with Strategic Acquisitions
Positive
Aug 8, 2025

TC Transcontinental has acquired Mirazed Inc. and Intergraphics Decal Limited from Canva Group to enhance its in-store marketing segment. This move, following a recent acquisition of Middleton Group, strengthens its leadership in in-store marketing, expanding its capabilities in Quebec and Western Canada. The acquisition aims to accelerate growth in this sector, which generated over $200 million in revenue last fiscal year, leveraging a network of over 1,200 employees across Canada.

The most recent analyst rating on ($TSE:TCL.A) stock is a Buy with a C$23.00 price target. To see the full list of analyst forecasts on Transcontinental stock, see the TSE:TCL.A Stock Forecast page.

M&A TransactionsBusiness Operations and Strategy
TC Transcontinental Expands In-Store Marketing with Middleton Group Acquisition
Positive
Jun 30, 2025

TC Transcontinental has announced the acquisition of Middleton Group, a provider of retail services and point-of-purchase display solutions, to enhance its in-store marketing activities. This strategic move bolsters TC Transcontinental’s leadership in the Canadian market and aligns with the growing emphasis on in-store customer experiences. The acquisition is expected to bring transformative opportunities for both companies, expanding their capabilities and market reach.

The most recent analyst rating on ($TSE:TCL.A) stock is a Hold with a C$18.00 price target. To see the full list of analyst forecasts on Transcontinental stock, see the TSE:TCL.A Stock Forecast page.

DividendsFinancial Disclosures
Transcontinental Inc. Reports Strong Q2 2025 Financial Results
Positive
Jun 5, 2025

Transcontinental Inc. reported its second-quarter fiscal year 2025 results, highlighting a slight increase in revenues to $684.1 million and a significant rise in net earnings attributable to shareholders by 112.6% compared to the previous year. The company successfully reduced its long-term debt, enabling it to pay a special dividend and maintain financial flexibility for future acquisitions. Despite a decrease in the Packaging Sector’s performance, the Retail Services and Printing Sector showed strong growth, contributing to the overall positive financial results.

The most recent analyst rating on ($TSE:TCL.A) stock is a Buy with a C$19.00 price target. To see the full list of analyst forecasts on Transcontinental stock, see the TSE:TCL.A 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