Transcontinental (TCL.A) AI Stock Analysis

• Market Cap: C$1.63B
• Dividend Yield: 9.72%
• Average Volume (3M): 102.06K
• Price to Earnings (P/E): 9.2
• Beta (1Y): 0.89
• Revenue Growth: -2.90%
• EPS Growth: 57.43%
• Country: CA
• Employees: 7,400
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Business Services
• EPS (TTM): 0.70
• Shares Outstanding: 74,112,650
• 10 Day Avg. Volume: 104,056
• 30 Day Avg. Volume: 102,060
• PEG Ratio: 0.29
• Price to Book (P/B): 0.78
• Price to Sales (P/S): 0.53
• P/FCF Ratio: 5.07
• 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$24.33
• Price Target Upside: 24.51% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 68 Neutral
• Price Target: C$21.50 ▲(10.03% Upside)

Transcontinental's overall stock score is driven by stable financial performance and attractive valuation metrics, including a low P/E ratio and high dividend yield. Positive earnings call sentiment and improvements in key financial metrics support the score, though technical indicators suggest cautious short-term momentum. Challenges in the Packaging sector and the need for revenue growth are notable risks.

Positive Factors

Strong Balance Sheet

A strong balance sheet with moderate leverage and a robust equity ratio provides financial stability, allowing for strategic investments and resilience against economic fluctuations.

Cost Management

Effective cost management and reduced financial expenses enhance profitability, allowing the company to allocate resources towards growth initiatives and maintain competitive pricing.

AI Investment

Investment in AI for content automation can improve operational efficiency and customer offerings, positioning the company for long-term technological leadership and market competitiveness.

Negative Factors

Revenue Decline

A decline in the Packaging sector revenue due to operational sales and lower volumes could impact overall growth prospects, necessitating strategic adjustments to regain momentum.

Non-Recurring Growth

Reliance on non-recurring factors for growth in book printing may not sustain future performance, indicating potential volatility in revenue streams that require diversification.

Packaging Sector Challenges

Challenges in the beverage segment due to external factors like weather and inflation can affect the Packaging sector's performance, highlighting the need for adaptive strategies.

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. The balance sheet is strong with moderate leverage and improving returns. Cash flow is consistent but indicates a need for capital expenditure. The company is financially sound but should focus on revenue growth.

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	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	1.38B	1.38B	1.36B	1.32B	1.25B	1.25B
EBITDA	498.10M	416.30M	391.70M	447.50M	450.00M	482.10M
Net Income	180.90M	121.30M	85.80M	141.20M	130.60M	131.70M
Balance Sheet
Total Assets	3.29B	3.64B	3.70B	3.80B	3.61B	3.60B
Cash, Cash Equivalents and Short-Term Investments	43.20M	185.20M	137.00M	45.70M	231.10M	241.00M
Total Debt	842.70M	989.00M	1.06B	1.15B	1.13B	1.17B
Total Liabilities	1.42B	1.73B	1.79B	1.92B	1.85B	1.86B
Stockholders Equity	1.86B	1.91B	1.90B	1.88B	1.76B	1.73B
Cash Flow
Free Cash Flow	285.80M	292.20M	294.80M	78.40M	177.00M	329.50M
Operating Cash Flow	387.20M	413.70M	472.30M	220.80M	315.30M	427.00M
Investing Cash Flow	38.10M	-112.60M	-165.20M	-257.40M	-181.00M	126.40M
Financing Cash Flow	-444.90M	-258.00M	-216.30M	-150.90M	-150.10M	-526.40M

Transcontinental Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 19.54
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 19.54 is below the 20-day moving average (MA) of 19.74, below the 50-day MA of 19.64, and above the 200-day MA of 18.30, indicating a neutral trend. The MACD of -0.10 indicates Positive momentum. The RSI at 47.13 is Neutral, neither overbought nor oversold. The STOCH value of 16.83 is Positive, 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	68 Neutral	C$1.63B	9.23	9.36%	9.72%	-2.90%	57.43%
CGY	66 Neutral	563.13M	-914.00	-0.22%	2.26%	1.44%	-103.80%
GDI	63 Neutral	665.55M	18.98	6.45%	―	-0.87%	117.78%
DCM	53 Neutral	77.43M	11.29	19.17%	5.36%	-8.92%	―
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Transcontinental Corporate Events

Transcontinental Inc. Reports Q3 2025 Results with Earnings Growth Amid Revenue Decline

Transcontinental Inc. reported a 2.2% decrease in revenues for the third quarter of fiscal year 2025, primarily due to the sale of its industrial packaging operations and lower demand in the Packaging Sector. Despite this, the company achieved a 16.7% increase in adjusted net earnings per share, driven by improved profitability in its Retail Services and Printing Sector and strategic acquisitions. The company remains optimistic about organic growth in earnings for the fiscal year, supported by expected volume growth in several markets.

The most recent analyst rating on ($TSE:TCL.A) stock is a Buy with a C$25.00 price target. To see the full list of analyst forecasts on Transcontinental stock, see the TSE:TCL.A Stock Forecast page.

TC Transcontinental Expands In-Store Marketing Segment with Strategic Acquisitions

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.

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.