Transcontinental (TCL.A) AI Stock Analysis

• Market Cap: C$1.92B
• Dividend Yield: 8.32%
• Average Volume (3M): 118.84K
• Price to Earnings (P/E): 11.3
• Beta (1Y): 0.73
• Revenue Growth: -2.45%
• EPS Growth: 44.20%
• Country: CA
• Employees: 7,400
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Business Services
• EPS (TTM): 0.82
• Shares Outstanding: 74,112,650
• 10 Day Avg. Volume: 111,798
• 30 Day Avg. Volume: 118,845
• PEG Ratio: 0.22
• Price to Book (P/B): 0.86
• Price to Sales (P/S): 0.60
• P/FCF Ratio: 6.72
• 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$27.40
• Price Target Upside: 19.70% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: C$25.00 ▲(9.22% Upside)

Transcontinental's overall stock score reflects a stable financial foundation with strong cash flow metrics and a positive technical outlook. The stock's undervaluation and high dividend yield make it attractive, despite challenges in revenue growth and recent earnings call highlights. The company's strategic initiatives and cost management efforts are expected to support future performance.

Positive Factors

Sustainable Packaging Demand

The growing demand for sustainable packaging solutions positions Transcontinental to capitalize on long-term industry trends, supporting revenue growth and market leadership in the packaging sector.

Strong Cash Flow Metrics

Strong cash flow metrics ensure financial flexibility, enabling Transcontinental to invest in growth opportunities and manage debt effectively, supporting long-term stability.

Strategic Acquisitions

Strategic acquisitions enhance Transcontinental's market position and revenue base, fostering growth in the ISM business and diversifying income streams for sustained performance.

Negative Factors

Decline in Revenue Growth

Declining revenue growth indicates challenges in market conditions and competitive pressures, potentially impacting future profitability and necessitating strategic adjustments.

Decrease in Fourth Quarter Revenue

A decrease in fourth-quarter revenue reflects challenges in key segments, which could affect overall financial performance and necessitate operational adjustments to regain momentum.

Free Cash Flow Decline

Declining free cash flow growth could constrain liquidity, limiting the company's ability to invest in growth initiatives and manage financial obligations effectively over the long term.

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 generates revenue through multiple key streams, primarily from its flexible packaging and printing divisions. The flexible packaging segment accounts for a significant portion of the company's revenue, driven by demand for sustainable packaging solutions and the growing need for food and consumer goods packaging. The commercial printing segment contributes to earnings through the production of printed materials for businesses, including marketing collateral and promotional products. Additionally, Transcontinental's publishing division generates revenue from the printing and distribution of newspapers and magazines. The company benefits from strategic partnerships with major brands and retailers, which enhance its market presence and drive sales. Its focus on innovation, sustainability, and operational efficiency further strengthens its competitive advantage and profitability.

Transcontinental Financial Statement Overview

Summary

Transcontinental demonstrates a stable financial foundation with moderate leverage and strong cash flow metrics. However, the decline in revenue growth and gross profit margin poses challenges that need addressing to sustain profitability. The company should focus on improving revenue streams and managing costs to enhance future performance.

Income Statement

Transcontinental's income statement shows a mixed performance. The company experienced a decline in revenue growth with a negative rate of -0.612% in the latest year, indicating a challenging market environment. However, the company maintains a reasonable net profit margin of 6.23% and an EBIT margin of 9.32%, suggesting operational efficiency. The gross profit margin has decreased significantly from previous years, which could impact future profitability if not addressed.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.41, indicating moderate leverage. The equity ratio is 57.16%, showing a strong equity base relative to total assets. Return on equity is at 8.94%, which is decent but shows room for improvement. Overall, the balance sheet suggests financial stability but highlights potential for better asset utilization.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth by -7.77%, which is a concern for future liquidity. However, the operating cash flow to net income ratio is 1.84, indicating strong cash generation relative to net income. The free cash flow to net income ratio is 1.44, suggesting good cash conversion. Despite the decline in free cash flow growth, the company maintains healthy cash flow metrics.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.74B	2.81B	2.94B	2.96B	2.64B
Gross Profit	1.37B	1.38B	1.36B	1.32B	1.25B
EBITDA	474.50M	416.30M	391.70M	447.50M	450.00M
Net Income	171.00M	121.30M	85.80M	141.20M	130.60M
Balance Sheet
Total Assets	3.35B	3.64B	3.70B	3.80B	3.61B
Cash, Cash Equivalents and Short-Term Investments	47.00M	185.20M	137.00M	45.70M	231.10M
Total Debt	787.40M	989.00M	1.06B	1.15B	1.13B
Total Liabilities	1.43B	1.73B	1.79B	1.92B	1.85B
Stockholders Equity	1.91B	1.91B	1.90B	1.88B	1.76B
Cash Flow
Free Cash Flow	245.60M	275.30M	277.50M	69.00M	168.00M
Operating Cash Flow	314.90M	370.40M	422.80M	186.10M	283.00M
Investing Cash Flow	11.00M	-112.60M	-165.20M	-257.40M	-181.00M
Financing Cash Flow	-470.40M	-214.70M	-166.80M	-116.20M	-117.80M

Transcontinental Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 22.89
• 50DMA: Positive
• 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 22.89 is above the 20-day moving average (MA) of 22.80, above the 50-day MA of 20.98, and above the 200-day MA of 19.63, indicating a bullish trend. The MACD of 0.48 indicates Positive momentum. The RSI at 59.45 is Neutral, neither overbought nor oversold. The STOCH value of 42.06 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
TCL.A	74 Outperform	C$1.92B	11.28	8.95%	8.32%	-2.45%	44.20%
DXT	73 Outperform	C$778.16M	19.52	14.38%	3.02%	-0.73%	221.74%
KBL	71 Outperform	C$441.76M	20.70	8.30%	3.43%	26.29%	-6.47%
CGY	71 Outperform	C$675.35M	33.02	6.36%	1.98%	3.69%	92.38%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
GDI	61 Neutral	C$853.65M	20.33	8.55%	―	-2.83%	179.03%
DCM	54 Neutral	C$103.84M	9.87	26.87%	5.99%	-7.01%	―

Transcontinental Corporate Events

Transcontinental Inc. Reports Strong Fiscal Year 2025 Amid Strategic Shifts

Transcontinental Inc. reported a strong fiscal year 2025, with a notable increase in adjusted net earnings per share, despite a challenging fourth quarter affected by a labor conflict at Canada Post. The company announced the sale of its Packaging Sector for $2.1 billion, which is expected to create significant value for shareholders. Additionally, the renewal of a 10-year printing contract with The Globe and Mail is set to bring stability to its newspaper printing operations. The company’s strategic initiatives, including cost reduction and a share repurchase program, have strengthened its financial position, positioning it well for future growth opportunities.

The most recent analyst rating on ($TSE:TCL.A) stock is a Hold with a C$26.00 price target. To see the full list of analyst forecasts on Transcontinental stock, see the TSE:TCL.A Stock Forecast page.

Transcontinental Sells Packaging Business to ProAmpac for $2.10 Billion

Transcontinental Inc. has announced the sale of its Packaging Business to ProAmpac Holdings Inc. for approximately $2.10 billion, marking a significant divestiture from its packaging sector. This transaction is expected to provide immediate value to shareholders and allow Transcontinental to focus on its core businesses of Retail Services & Printing and Educational Publishing. The sale aligns with industry consolidation trends and positions ProAmpac to expand its market reach into new segments such as protein, dairy, and medical, while enhancing its geographic presence. The move is seen as a strategic step for Transcontinental as it approaches its 50th anniversary, aiming to reinvent itself and concentrate resources on its remaining business sectors.

The most recent analyst rating on ($TSE:TCL.A) stock is a Hold with a C$26.00 price target. To see the full list of analyst forecasts on Transcontinental stock, see the TSE:TCL.A Stock Forecast page.