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Transcontinental Inc. Class B (TSE:TCL.B)
:TCL.B
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Transcontinental Inc. Class B
(TSX:TCL.B)
Rating:74Outperform
Price Target:
C$23.00
▲(14.03%Upside)
Transcontinental Inc. Class B (TCL.B) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$1.68B
Dividend Yield9.42%
Average Volume (3M)103.00
Price to Earnings (P/E)9.4
Beta (1Y)0.60
Revenue Growth-2.58%
EPS Growth100.21%
CountryCA
Employees7,400
SectorConsumer Cyclical
Sector Strength68
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)0.58
Shares Outstanding9,506,272
10 Day Avg. Volume151
30 Day Avg. Volume103
Financial Highlights & Ratios
PEG Ratio0.80
Price to Book (P/B)0.90
Price to Sales (P/S)0.00
P/FCF Ratio5.97
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$24.00Price Target Upside18.99% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering0
Transcontinental Inc. Class B Business Overview & Revenue Model
Company DescriptionTranscontinental 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 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: -4.68%|
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. Class B exhibits solid financial health with stable profitability margins and a strong equity base. Despite slightly negative revenue growth, the company demonstrates strong cash flow and financial flexibility. Continued focus on revenue expansion and leverage management will be crucial for future growth.Income Statement
Transcontinental Inc. Class B's income statement shows a stable gross profit margin at 49.8% for TTM, indicating efficient production and service delivery. The net profit margin for TTM is 6.5%, reflecting a moderate level of profitability. The revenue growth has been slightly negative at -1.3% TTM compared to the previous year, which raises concerns about growth potential. The EBIT margin of 10.4% and EBITDA margin of 17.9% indicate solid operating performance, though there is room for improvement in converting revenue to profit.75
Positive
Balance Sheet
The balance sheet reveals a debt-to-equity ratio of 0.45 TTM, reflecting a moderate level of leverage, which is manageable but should be monitored. The return on equity (ROE) for TTM is 9.7%, indicating decent profitability for shareholders, though there is potential for enhancement. The equity ratio of 56.7% suggests a strong capital base, providing financial stability and reducing insolvency risk.70
Positive
Cash Flow
Cash flow analysis shows a healthy operating cash flow to net income ratio of 2.1 TTM, demonstrating strong cash generation from operations. The free cash flow to net income ratio is 1.58 for TTM, indicating robust free cash flow relative to net earnings. Despite a minor decline in free cash flow growth rate at -2.2%, the company maintains good liquidity and financial flexibility.80
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.81B | 2.94B | 2.96B | 2.64B | 2.57B |
| Gross Profit | 1.38B | 1.36B | 1.32B | 1.25B | 1.25B |
| EBITDA | 416.30M | 391.70M | 447.50M | 450.00M | 482.10M |
| Net Income | 121.30M | 85.80M | 141.20M | 130.60M | 131.70M |
Balance Sheet | |||||
| Total Assets | 3.64B | 3.70B | 3.80B | 3.61B | 3.60B |
| Cash, Cash Equivalents and Short-Term Investments | 185.20M | 137.00M | 45.70M | 231.10M | 241.00M |
| Total Debt | 989.00M | 1.06B | 1.15B | 1.13B | 1.17B |
| Total Liabilities | 1.73B | 1.79B | 1.92B | 1.85B | 1.86B |
| Stockholders Equity | 1.91B | 1.90B | 1.88B | 1.76B | 1.73B |
Cash Flow | |||||
| Free Cash Flow | 292.20M | 294.80M | 78.40M | 177.00M | 329.50M |
| Operating Cash Flow | 413.70M | 472.30M | 220.80M | 315.30M | 427.00M |
| Investing Cash Flow | -112.60M | -165.20M | -257.40M | -181.00M | 126.40M |
| Financing Cash Flow | -258.00M | -216.30M | -150.90M | -150.10M | -526.40M |
Transcontinental Inc. Class B Technical Analysis
Neutral
20.17
Price Trends
20.51
Negative
18.90
Positive
17.38
Positive
Market Momentum
-0.04
Positive
40.86
Neutral
2.05
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TCL.B, the sentiment is Neutral. The current price of 20.17 is below the 20-day moving average (MA) of 20.52, below the 50-day MA of 20.51, and above the 200-day MA of 17.38, indicating a neutral trend. The MACD of -0.04 indicates Positive momentum. The RSI at 40.86 is Neutral, neither overbought nor oversold. The STOCH value of 2.05 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:TCL.B.
Transcontinental Inc. Class B Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Performance Comparison
TSE:TCL.B
Transcontinental Inc. Class B
20.17
6.47
47.23%
TSE:DCM
Data Commun Management
1.71
-0.64
-27.23%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.