Transcontinental (TCL.A) AI Stock Analysis

• Market Cap: C$1.61B
• Dividend Yield: 9.91%
• Average Volume (3M): 118.84K
• Price to Earnings (P/E): 9.2
• Beta (1Y): 0.92
• 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: 111,798
• 30 Day Avg. Volume: 118,845
• 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: 26.72% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 66 Neutral
• Price Target: C$21.00 ▲(9.38% Upside)

Transcontinental's overall stock score is driven by a stable financial performance with strong profit margins and a solid balance sheet. However, the significant revenue decline and cash flow challenges weigh on the score. The stock's valuation is attractive with a low P/E ratio and high dividend yield. Positive sentiment from the earnings call and strategic initiatives in AI and acquisitions provide a balanced outlook, despite technical indicators suggesting a bearish trend.

Positive Factors

Strong Profit Margins

The high gross profit margin reflects the company's ability to manage costs effectively, which supports long-term profitability and competitive positioning in the market.

AI Investment

The strategic investment in AI technology is expected to enhance operational efficiency and improve customer offerings, contributing to sustainable growth and innovation.

Stable Balance Sheet

A stable balance sheet with moderate leverage indicates financial health, providing the company with flexibility to invest in growth opportunities and withstand economic fluctuations.

Negative Factors

Revenue Decline

The substantial decline in revenue poses a challenge to the company's growth prospects, requiring strategic initiatives to reverse this trend and sustain long-term profitability.

Cash Flow Challenges

Declining free cash flow growth indicates potential liquidity issues, which could limit the company's ability to fund operations and invest in future growth initiatives.

Packaging Sector Revenue Decline

The decline in the Packaging sector's revenue highlights challenges in maintaining market share and demand, necessitating strategic adjustments to stabilize and grow this core business segment.

Transcontinental Business Overview & Revenue Model

Company Description

Transcontinental Inc. (TCL.A) is a leading North American provider of printing and packaging solutions, operating primarily in the flexible packaging, commercial printing, and publishing sectors. The company offers a diverse range of products, including flexible packaging materials, labels, and printed media, serving various industries such as food, beverage, and consumer goods. Transcontinental is committed to innovation and sustainability, focusing on providing high-quality services that meet the evolving needs of its clients.

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's financial statements present a mixed picture. Strong gross profit margins and a stable balance sheet with moderate leverage are positive, but significant revenue and free cash flow growth declines raise concerns. The company needs to address revenue growth challenges to enhance profitability and cash flow generation.

Income Statement

Transcontinental's income statement shows a mixed performance. The TTM data reveals a gross profit margin of 49.82%, which is strong, indicating efficient cost management. However, the net profit margin is relatively low at 6.52%, suggesting limited profitability. The company has experienced a significant revenue decline of 56.2% in the TTM period, which is concerning. EBIT and EBITDA margins have improved over the previous year, reflecting better operational efficiency.

Balance Sheet

The balance sheet indicates a stable financial position with a debt-to-equity ratio of 0.45, showing moderate leverage. The return on equity (ROE) is 9.49%, which is a positive sign of profitability relative to shareholder equity. The equity ratio stands at 57.33%, suggesting a solid equity base relative to total assets. Overall, the balance sheet reflects a balanced approach to financing with a focus on equity.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth by 6.82% in the TTM period, indicating potential cash flow challenges. The operating cash flow to net income ratio is strong at 0.94, suggesting good cash generation relative to net income. The free cash flow to net income ratio is 0.74, indicating a healthy conversion of net income to free cash flow. Despite the decline in free cash flow growth, cash flow metrics remain relatively stable.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.76B	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	488.20M	416.30M	391.70M	447.50M	450.00M	482.10M
Net Income	176.00M	121.30M	85.80M	141.20M	130.60M	131.70M
Balance Sheet
Total Assets	3.27B	3.64B	3.70B	3.80B	3.61B	3.60B
Cash, Cash Equivalents and Short-Term Investments	35.90M	185.20M	137.00M	45.70M	231.10M	241.00M
Total Debt	826.40M	989.00M	1.06B	1.15B	1.13B	1.17B
Total Liabilities	1.39B	1.73B	1.79B	1.92B	1.85B	1.86B
Stockholders Equity	1.87B	1.91B	1.90B	1.88B	1.76B	1.73B
Cash Flow
Free Cash Flow	266.30M	292.20M	294.80M	78.40M	177.00M	329.50M
Operating Cash Flow	366.70M	413.70M	472.30M	220.80M	315.30M	427.00M
Investing Cash Flow	27.80M	-112.60M	-165.20M	-257.40M	-181.00M	126.40M
Financing Cash Flow	-445.10M	-258.00M	-216.30M	-150.90M	-150.10M	-526.40M

Transcontinental Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 19.20
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• 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 Negative. The current price of 19.2 is below the 20-day moving average (MA) of 19.32, below the 50-day MA of 19.59, and above the 200-day MA of 18.72, indicating a neutral trend. The MACD of -0.01 indicates Negative momentum. The RSI at 46.25 is Neutral, neither overbought nor oversold. The STOCH value of 24.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:TCL.A.

Transcontinental Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GDI	70 Outperform	C$700.56M	20.01	7.32%	―	-2.83%	179.03%
TCL.A	66 Neutral	C$1.61B	9.17	9.36%	9.91%	-2.90%	57.43%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
CGY	61 Neutral	C$575.68M	-934.07	-0.21%	2.20%	1.44%	-103.80%
DCM	52 Neutral	C$73.01M	10.65	17.74%	5.64%	-8.92%	―

Transcontinental Corporate Events

Transcontinental Inc. Earnings Call Highlights Growth and Challenges

The recent earnings call of Transcontinental Inc. conveyed an overall positive sentiment, highlighted by significant improvements in adjusted earnings per share, EBITDA growth, and effective cost management. The Retail Services and Printing sector demonstrated robust performance, bolstered by strategic acquisitions and advancements in artificial intelligence. However, the Packaging sector faced hurdles with a revenue decline and non-recurring growth in book printing, which tempered the otherwise optimistic outlook.

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.