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Transcontinental Inc. Class B (TSE:TCL.B)
TSX:TCL.B
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Transcontinental Inc. Class B
(TSX:TCL.B)
Rating:77Outperform
Price Target:
C$24.00
▲(14.18%Upside)
Transcontinental Inc. Class B (TCL.B) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$1.76B
Dividend Yield4.28%
Average Volume (3M)269.00
Price to Earnings (P/E)9.8
Beta (1Y)0.64
Revenue Growth-2.58%
EPS Growth100.21%
CountryCA
Employees7,400
SectorConsumer Cyclical
Sector Strength63
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)0.58
Shares Outstanding9,506,272
10 Day Avg. Volume206
30 Day Avg. Volume269
Financial Highlights & Ratios
PEG Ratio0.27
Price to Book (P/B)0.80
Price to Sales (P/S)0.00
P/FCF Ratio5.59
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
Transcontinental Inc. Class B Business Overview & Revenue Model
Company DescriptionTranscontinental Inc. Class B (TCL.B) is a leading Canadian company primarily engaged in flexible packaging, printing, and media. With operations spanning across North America, the company offers a wide range of products and services including packaging solutions for various industries such as food and beverage, agriculture, and industrial products, as well as printing services for newspapers, magazines, and marketing materials. Transcontinental also operates in the media sector, providing content creation and distribution services.
How the Company Makes MoneyTranscontinental Inc. generates revenue through multiple streams. The flexible packaging segment, which is the largest component of its business, involves the production and sale of packaging products to clients in the food and beverage, agriculture, and industrial sectors. This segment capitalizes on long-term contracts and partnerships with key clients, ensuring a stable revenue flow. In the printing sector, the company offers services for newspapers, magazines, and other printed materials, leveraging its extensive infrastructure and expertise to serve a wide array of customers. Although the media segment is smaller, it contributes to earnings through advertising, subscription fees, and content licensing. The company's diversified revenue model, backed by significant client relationships and a broad geographic presence, underpins its financial performance.
Transcontinental Inc. Class B Earnings Call Summary
Earnings Call Date:Jun 04, 2025
(Q2-2025)
| % Change Since: -1.73%|
Next Earnings Date:Sep 04, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mixed performance for TC Transcontinental. The Retail Services & Printing sector showed strong growth and profitability improvements, contributing positively to the overall financial health of the company. However, the Packaging sector faced revenue declines and challenges in Latin America. The company remains confident in its outlook, supported by a strong financial position and effective cost management.Q2-2025 Updates
Positive Updates
Positive Growth in Retail Services & Printing
Retail Services & Printing sector experienced a strong quarter with a 5.1% increase in revenues to $279.9 million and a 15.5% growth in adjusted EBITDA to $54.4 million, marking the fourth consecutive quarter of profitability improvement.
Improvement in Safety Metrics
The company reported a significant year-over-year improvement in safety incidents, reducing from 46 incidents to 28, a decrease of 40%.
Strong Financial Position
Despite a special dividend, the net debt ratio remained healthy at 1.70x. Financial expenses decreased by $5.4 million due to lower debt levels and lower interest rates.
Adjusted Earnings Per Share Increase
Adjusted net earnings per share grew by 11.5% from $0.52 to $0.58.
Negative Updates
Decline in Packaging Revenue
Packaging sector generated revenues of $404 million, a 2% decrease compared to the previous year, primarily due to the sale of industrial activities and lower volumes across most markets.
Challenges in Latin America
The Latin American market faced challenges due to lower crop yields, impacting sales negatively.
Potential Impact of Tariffs and Labor Issues
While the impact of tariffs and labor issues at Canada Post is currently minimal, there is some uncertainty regarding future effects.
Media Segment Decline
The Media segment saw a decrease in revenues and profitability due to the end of a significant contract.
Company Guidance
During the TC Transcontinental Second Quarter Fiscal Year 2025 Results Conference Call, the company reported a 0.1% increase in revenues compared to the same quarter last year, primarily driven by growth in the Retail Services & Printing sector and a favorable foreign exchange impact. Adjusted EBITDA for the quarter stood at $108.5 million, with adjusted net earnings per share increasing by 11.5% to $0.58. The Packaging sector experienced a 2% decrease in revenues, attributed to the sale of industrial activities and lower volumes, although it maintained a solid EBITDA margin of 16.2%. In contrast, the Retail Services & Printing sector saw a 5.1% increase in revenues, fueled by growth in Book Printing, Specialty Solutions, and In-store Marketing. The company also highlighted significant cost reductions contributing to these results. Safety improvements were noted, with a 40% year-over-year decrease in incidents. Looking ahead, the company remains optimistic about achieving organic volume and profit growth in the second half of fiscal 2025, supported by a strong sales pipeline and continued cost management efforts.Transcontinental Inc. Class B Financial Statement Overview
Summary
Transcontinental Inc. shows a stable financial footing with adequate profitability and healthy leverage. The company manages operational costs effectively, but there is room for profit margin and revenue growth improvements. A robust balance sheet with manageable debt levels and strong cash generation, although recent declines in free cash flow are noted.Income Statement
Transcontinental Inc. has shown moderate financial performance over recent periods. The gross profit margin for TTM stands at 41.53%, indicating efficient cost management. However, the net profit margin is lower at 5.87%, reflecting limited bottom-line profitability. Revenue has seen fluctuations, with a recent decline in TTM compared to previous annual figures, suggesting potential challenges in maintaining sales growth. The EBIT and EBITDA margins are 9.74% and 17.28% respectively, indicating operational efficiency but also highlighting room for improvement in profitability.72
Positive
Balance Sheet
The balance sheet reveals a stable financial position with a debt-to-equity ratio of 0.51, indicating moderate leverage. The return on equity (ROE) for TTM is 8.30%, which is reasonable but suggests potential for enhanced returns on equity investments. An equity ratio of 54.29% in the TTM reflects a strong capital structure with a solid equity base. Overall, the company maintains a balanced approach to leveraging debt and equity, though there is scope for increasing returns.68
Positive
Cash Flow
Cash flow analysis shows a slight decrease in free cash flow, with a growth rate of -6.58%. The operating cash flow to net income ratio is 2.33, indicating strong cash generation relative to net income. Additionally, the free cash flow to net income ratio is 1.67, demonstrating effective cash conversion from profits. The company efficiently manages its cash flow operations, although recent free cash flow contraction warrants attention.75
Positive
| 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 Inc. Class B Technical Analysis
Positive
21.02
Price Trends
18.99
Positive
17.77
Positive
16.73
Positive
Market Momentum
0.62
Positive
59.71
Neutral
85.73
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TCL.B, the sentiment is Positive. The current price of 21.02 is above the 20-day moving average (MA) of 20.58, above the 50-day MA of 18.99, and above the 200-day MA of 16.73, indicating a bullish trend. The MACD of 0.62 indicates Positive momentum. The RSI at 59.71 is Neutral, neither overbought nor oversold. The STOCH value of 85.73 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:TCL.B.
Transcontinental Inc. Class B Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Performance Comparison
TSE:TCL.B
Transcontinental Inc. Class B
21.02
7.63
56.98%
TSE:DCM
Data Commun Management
1.72
-0.91
-34.60%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.