Transcontinental (TCL.A) AI Stock Analysis

• Market Cap: C$1.69B
• Dividend Yield: 9.37%
• Average Volume (3M): 144.63K
• Price to Earnings (P/E): 9.5
• Beta (1Y): 0.89
• Revenue Growth: -2.58%
• EPS Growth: 100.21%
• Country: CA
• Employees: 7,400
• Sector: Consumer Cyclical
• Sector Strength: 71
• Industry: Specialty Business Services
• EPS (TTM): 0.58
• Shares Outstanding: 74,112,650
• 10 Day Avg. Volume: 128,432
• 30 Day Avg. Volume: 144,628
• PEG Ratio: 0.80
• Price to Book (P/B): 0.90
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 5.97
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$24.04
• Price Target Upside: 18.60% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 73 Outperform
• Price Target: C$23.00 ▲(13.47%Upside)

Transcontinental's high valuation score and solid technical indicators are the most significant positives. Financial stability and recent earnings call insights support the stock's potential, though challenges in the Packaging sector and revenue growth concerns moderate the overall outlook.

Positive Factors

Earnings

Retail Services & Printing adjusted EBITDA was above forecast, driven by cost reductions despite lower volumes.

Financial Performance

The company declared a special dividend of $1/share, reflecting positive financial performance.

Negative Factors

Market Demand

Approximately 25-35% of EBITDA is still tied to markets with declining demand trends.

Transcontinental Business Overview & Revenue Model

Company Description

Transcontinental Inc. engages in the flexible packaging business in Canada, the United States, Latin America, the United Kingdom, Australia, and New Zealand. It operates through Packaging, Printing, and Media sectors. The Packaging sector engages in the extrusion, lamination, printing, and converting packaging solutions; and manufacturing and recycling flexible plastic, including rollstock, bags and pouches, coextruded films, shrink films and bags, and advanced coatings. This sector serves cheese and dairy, coffee and tea, meat and protein, pet food, agriculture, beverage, confectionery, industrial, and consumer product markets, as well as supermarkets. The Printing sector provides integrated services for retailers, such as premedia services, flyer and in-store, and door-to-door marketing product printing distribution, as well as print solutions for newspapers, magazines, 4-color books, and personalized and mass marketing products. The Media sector is involved in printing and digital publishing of educational and trade books, and specialized publications for professionals and newspapers in French and English. Transcontinental Inc. was founded in 1976 and is headquartered in Montreal, Canada.

How the Company Makes Money

Transcontinental 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 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

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

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

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.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.81B	2.94B	2.96B	2.64B	2.57B
Gross Profit	1.38B	1.36B	1.32B	1.25B	1.25B
EBITDA	416.30M	391.70M	447.50M	450.00M	482.10M
Net Income	121.30M	85.80M	141.20M	130.60M	131.70M
Balance Sheet
Total Assets	3.64B	3.70B	3.80B	3.61B	3.60B
Cash, Cash Equivalents and Short-Term Investments	185.20M	137.00M	45.70M	231.10M	241.00M
Total Debt	989.00M	1.06B	1.15B	1.13B	1.17B
Total Liabilities	1.73B	1.79B	1.92B	1.85B	1.86B
Stockholders Equity	1.91B	1.90B	1.88B	1.76B	1.73B
Cash Flow
Free Cash Flow	292.20M	294.80M	78.40M	177.00M	329.50M
Operating Cash Flow	413.70M	472.30M	220.80M	315.30M	427.00M
Investing Cash Flow	-112.60M	-165.20M	-257.40M	-181.00M	126.40M
Financing Cash Flow	-258.00M	-216.30M	-150.90M	-150.10M	-526.40M

Transcontinental Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 20.27
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 below the 20-day moving average (MA) of 20.48, below the 50-day MA of 20.64, and above the 200-day MA of 17.61, indicating a neutral trend. The MACD of -0.10 indicates Positive momentum. The RSI at 46.50 is Neutral, neither overbought nor oversold. The STOCH value of 29.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:TCL.A.

Transcontinental Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GDI	74 Outperform	C$789.32M	20.73	7.93%	―	1.49%	152.09%
TCL.A	73 Outperform	C$1.69B	9.49	9.65%	9.37%	-2.58%	100.21%
CGY	70 Outperform	C$597.13M	14,224.32	0.01%	2.13%	3.03%	-99.78%
DCM	70 Outperform	C$94.03M	13.05	21.19%	2.94%	-5.30%	―
Sector *	57 Neutral	HK$26.32B	4.03	-2.03%	5.52%	-0.23%	-68.02%

Transcontinental Corporate Events

TC Transcontinental Expands In-Store Marketing with Middleton Group Acquisition

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.

Transcontinental Inc. Reports Strong Q2 2025 Financial Results

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.