Transcontinental (TCL.A) AI Stock Analysis

• Market Cap: C$1.76B
• Dividend Yield: 4.25%
• Average Volume (3M): 205.90K
• Price to Earnings (P/E): 9.9
• Beta (1Y): 0.91
• Revenue Growth: -2.58%
• EPS Growth: 100.21%
• Country: CA
• Employees: 7,400
• Sector: Consumer Cyclical
• Sector Strength: 66
• Industry: Specialty Business Services
• EPS (TTM): 0.58
• Shares Outstanding: 74,112,650
• 10 Day Avg. Volume: 196,474
• 30 Day Avg. Volume: 205,900
• PEG Ratio: 0.27
• Price to Book (P/B): 0.80
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 5.59
• 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: 13.61% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 76 Outperform
• Price Target: C$24.00 ▲(13.42%Upside)

Transcontinental's overall stock score is bolstered by strong financial and technical performance, complemented by an attractive valuation. The company's stable financial position and solid cash flow generation are significant strengths. The earnings call insights add a balanced perspective with positive earnings growth but highlight sector-specific challenges.

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.

Growth in Retail Services

Retail Services & Printing growth was a key driver of the beat in Q1/25.

Negative Factors

Declining Demand Trends

Approximately 25-35% of EBITDA still has declining demand trends due to the secular decline of printing markets.

Packaging Segment Performance

Packaging adjusted EBITDA was slightly below forecast, with lower volumes partially offset by cost reductions.

Postal Strike Impact

The Canada Post strike is expected to weigh on adjusted EBITDA, with an impact of about $1 million per week.

Transcontinental Business Overview & Revenue Model

Company Description

Transcontinental Inc. (TCL.A) is a leading Canadian company operating primarily in the packaging, printing, and media sectors. The company is recognized for its flexible packaging solutions and is a prominent player in the printing industry, offering a range of services for retailers, publishers, and marketers. Additionally, Transcontinental manages a diverse portfolio of media properties, including newspapers, magazines, and digital platforms, serving various communities and industries.

How the Company Makes Money

Transcontinental generates revenue through several key streams. The largest portion of its income comes from its Packaging sector, where it provides flexible plastic and paper packaging solutions to industries such as food, agriculture, and consumer goods. In the Printing sector, Transcontinental earns money by offering integrated printing services, including the production of marketing materials, flyers, and newspapers, as well as premedia and distribution services. The Media segment contributes to revenue by monetizing advertising across its print and digital media properties. The company also engages in strategic partnerships and acquisitions to enhance its market presence and expand its service offerings, contributing to its overall profitability.

Transcontinental Financial Statement Overview

Summary

Transcontinental exhibits strong gross margins and solid cash flow generation, with a stable financial position. However, there is room for improvement in net profitability and revenue growth consistency. Leverage is under control, supporting financial stability, while cash flows remain robust, underscoring operational efficiency.

Income Statement

Transcontinental's income statement shows moderate profitability and stable revenues. The Gross Profit Margin is strong at 41.5% TTM, indicating efficient production. However, the Net Profit Margin stands at 5.9% TTM, which is relatively low, reflecting challenges in controlling bottom-line expenses. Revenue growth has been inconsistent, with a decline of 4.9% from the previous annual report. EBIT and EBITDA margins are at 9.7% and 17.3% TTM, respectively, showing reasonable operating efficiency.

Balance Sheet

The balance sheet indicates a solid equity position with an Equity Ratio of 54.3% TTM, suggesting financial stability. The Debt-to-Equity Ratio is at 0.51 TTM, indicating manageable leverage levels. Return on Equity is moderate at 8.3% TTM, pointing to efficient use of equity but also room for improvement in generating higher returns for shareholders.

Cash Flow

Transcontinental's cash flow statement shows a robust operational cash flow with an Operating Cash Flow to Net Income Ratio of 2.3 TTM, indicating strong cash generation relative to reported profits. Free Cash Flow to Net Income Ratio is also healthy at 1.7 TTM. However, Free Cash Flow has marginally declined by 6.6% compared to the previous year, hinting at slight pressures on free cash generation.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.78B	2.81B	2.94B	2.96B	2.64B	2.57B
	Gross Profit
1.15B	1.38B	457.30M	1.32B	1.24B	1.25B
	EBIT
270.40M	209.50M	164.70M	217.30M	233.80M	241.40M
	EBITDA
479.70M	416.30M	391.70M	446.00M	450.00M	479.60M
	Net Income Common Stockholders
163.00M	121.30M	85.80M	141.20M	130.60M	131.70M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
273.10M	185.20M	137.00M	45.70M	231.10M	241.00M
	Total Assets
3.62B	3.64B	3.70B	3.80B	3.61B	3.60B
	Total Debt
994.20M	989.00M	1.06B	1.15B	1.13B	1.17B
	Net Debt
721.10M	803.80M	921.00M	1.10B	894.80M	933.90M
	Total Liabilities
1.65B	1.73B	1.79B	1.92B	1.85B	1.86B
	Stockholders Equity
1.96B	1.91B	1.90B	1.88B	1.76B	1.73B
Cash Flow		Free Cash Flow
272.90M	292.20M	294.80M	78.40M	177.00M	329.50M
	Operating Cash Flow
379.90M	413.70M	472.30M	220.80M	315.30M	427.00M
	Investing Cash Flow
32.60M	-112.60M	-165.20M	-257.40M	-181.00M	126.40M
	Financing Cash Flow
-198.90M	-258.00M	-216.30M	-150.90M	-150.10M	-526.40M

Transcontinental Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 21.16
• 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 21.16 is above the 20-day moving average (MA) of 20.97, above the 50-day MA of 19.22, and above the 200-day MA of 17.00, indicating a bullish trend. The MACD of 0.57 indicates Positive momentum. The RSI at 60.41 is Neutral, neither overbought nor oversold. The STOCH value of 34.94 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
DCM	79 Outperform	C$95.13M	13.20	21.19%	1.45%	-5.30%	―
GDI	77 Outperform	C$776.60M	20.40	7.93%	―	1.49%	152.09%
TCL.A	76 Outperform	C$1.76B	9.88	9.65%	4.25%	-2.58%	100.21%
Sector *	63 Neutral	$6.96B	11.51	2.80%	3.85%	2.70%	-24.43%
CGY	58 Neutral	C$463.19M	11,008.11	0.01%	2.60%	3.03%	-99.78%

Transcontinental Corporate Events

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.

Transcontinental Inc. Announces Successful Election of Directors

Transcontinental Inc. announced the successful election of all proposed directors at its Annual Meeting of Shareholders, with each candidate receiving a majority of votes. This outcome reflects strong shareholder support and is likely to reinforce the company’s strategic direction and governance, potentially impacting its operations and stakeholder relations positively.

Transcontinental Inc. Reports Strong Q1 2025 Results Amid Strategic Initiatives

Transcontinental Inc. reported strong financial results for the first quarter of fiscal 2025, with revenues of $643 million and net earnings of $55.6 million. The company improved its net indebtedness ratio and declared a special dividend, reflecting a solid financial position. Despite weaker demand in certain sectors, cost-reduction initiatives and growth in cheese and dairy packaging helped maintain profitability. The Retail Services and Printing Sector saw a 6.1% increase in adjusted operating earnings, aided by a favorable product mix and increased book printing activities.