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Transcontinental Inc. Class B (TSE:TCL.B)
:TCL.B
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Transcontinental Inc. Class B
(TSX:TCL.B)
Select Model
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Rating:68Neutral
Price Target:
C$21.00
▲(11.58% Upside)
Transcontinental Inc. has a solid financial foundation with strong profitability and leverage management. The stock is attractively valued, offering a high dividend yield. However, technical indicators suggest bearish momentum, and challenges in revenue growth and the Packaging sector need to be addressed. Positive sentiment from the earnings call, driven by strategic acquisitions and profit growth, supports the overall score.
Transcontinental Inc. Class B (TCL.B) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$1.57B
Dividend Yield10.06%
Average Volume (3M)275.00
Price to Earnings (P/E)9.0
Beta (1Y)0.57
Revenue Growth-2.90%
EPS Growth57.43%
CountryCA
Employees7,400
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)0.70
Shares Outstanding9,506,272
10 Day Avg. Volume255
30 Day Avg. Volume275
Financial Highlights & Ratios
PEG Ratio0.29
Price to Book (P/B)0.78
Price to Sales (P/S)0.53
P/FCF Ratio5.07
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$21.00Price Target Upside11.58% Upside
Rating ConsensusHold
Number of Analyst Covering1
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 its multi-faceted business operations. Its Packaging sector is a primary revenue driver, focusing on the production and sale of flexible plastic packaging that is used in various industries such as food, beverage, and consumer goods. The Printing sector contributes significantly to the company's earnings by providing commercial printing services, including the production of marketing materials, magazines, and newspapers for a wide range of clients. Additionally, the Media sector adds value by managing a portfolio of media assets, offering content creation, and digital media services. Key partnerships with major consumer brands and media companies, as well as a strategic focus on sustainability and innovation, further bolster the company's revenue streams. The combination of these diverse operations enables Transcontinental Inc. to maintain a stable and diversified income base.
Transcontinental Inc. Class B Earnings Call Summary
Earnings Call Date:Sep 04, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Dec 10, 2025
Earnings Call Sentiment Positive
The earnings call depicted a positive outlook with improvements in adjusted earnings per share, strong performance in the Retail Services and Printing sector, and successful acquisitions enhancing capabilities. However, the company faced challenges in the Packaging sector with decreased revenue and non-recurring contributions from book printing activities. Overall, the sentiment leans towards positive due to sustained profit growth and strategic initiatives.Q3-2025 Updates
Positive Updates
Adjusted Earnings Per Share Improvement
The company reported a significant improvement in adjusted earnings per share for the third consecutive quarter, increasing by 16.7% from $0.60 to $0.70.
Retail Services and Printing Sector Growth
The Retail Services and Printing sector had a strong quarter with a 4.5% revenue increase to $261.2 million, largely due to growth in book printing activities.
Successful Acquisitions
The company acquired Middleton Group and Mirazed Intergraphics, enhancing in-store marketing capabilities in Quebec and Western Canada and diversifying product offerings.
Cost Savings and Debt Reduction
Financial expenses decreased by $4.6 million due to lower debt levels and favorable FX impact, with a net debt ratio improving to 1.68x.
Introduction of Artificial Intelligence
Investment of $2.5 million in AI to automate content production for flyers, with expected efficiency improvements and better customer offerings.
Negative Updates
Revenue Decrease in Packaging Sector
The Packaging sector saw a 6.3% revenue decrease due to the sale of industrial packaging operations and weaker-than-expected demand.
Non-Recurring Book Printing Contribution
Some of the growth in book printing activities is not expected to recur in future quarters.
Challenges in Beverage Segment
Lower-than-expected beverage volumes due to cooler summer temperatures and inflation impacts.
Company Guidance
During the TC Transcontinental Third Quarter Fiscal Year 2025 earnings call, significant metrics and guidance were shared. The company reported a 2.2% decrease in revenues year-over-year, primarily due to the sale of industrial packaging operations. Despite this, adjusted EBITDA increased by $1.6 million, reaching $122.6 million, with a notable 4.2% organic profit growth. Adjusted earnings per share rose by 16.7%, from $0.60 to $0.70. The Packaging sector experienced a 6.3% revenue decline, but adjusted EBITDA grew by 0.6% to $65.3 million, highlighting cost reduction efforts. The Retail Services and Printing sector saw a 4.5% revenue increase, with adjusted EBITDA up by 2.4% to $52 million, largely driven by book printing activities. The company announced acquisitions of Middleton Group and Mirazed, Intergraphics, enhancing in-store marketing capabilities in Canada. Additionally, a $2.5 million investment in AI for flyer content production was highlighted. Looking forward, TC Transcontinental expects organic profit growth in both main sectors for the fiscal year, with a continued focus on strategic acquisitions and operational efficiencies.Transcontinental Inc. Class B Financial Statement Overview
Summary
Transcontinental Inc. demonstrates strong profitability and leverage management, with a healthy gross profit margin and a stable balance sheet. However, challenges include a significant decline in revenue growth and negative free cash flow growth.Income Statement
Transcontinental Inc. shows a mixed performance in its income statement. The TTM data indicates a decline in revenue growth rate by 56.2%, which is concerning. However, the company maintains a healthy gross profit margin of 49.8% and a net profit margin of 6.5%, indicating strong profitability. The EBIT and EBITDA margins have improved over the previous year, suggesting operational efficiency gains.65
Positive
Balance Sheet
The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.45, which is a positive sign of leverage management. The return on equity is 9.5%, showing a decent return for shareholders. The equity ratio stands at 57.3%, indicating a strong equity base relative to total assets, which enhances financial stability.70
Positive
Cash Flow
Cash flow analysis reveals challenges with a negative free cash flow growth rate of -6.8% in the TTM period. However, the operating cash flow to net income ratio is strong at 0.94, indicating robust cash generation relative to net income. The free cash flow to net income ratio is 0.74, suggesting that a significant portion of earnings is converted into free cash flow.60
Neutral
| 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 Inc. Class B Technical Analysis
Negative
18.82
Price Trends
19.49
Negative
19.84
Negative
18.38
Positive
Market Momentum
-0.08
Positive
33.52
Neutral
30.64
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TCL.B, the sentiment is Negative. The current price of 18.82 is below the 20-day moving average (MA) of 19.54, below the 50-day MA of 19.49, and above the 200-day MA of 18.38, indicating a neutral trend. The MACD of -0.08 indicates Positive momentum. The RSI at 33.52 is Neutral, neither overbought nor oversold. The STOCH value of 30.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:TCL.B.
Transcontinental Inc. Class B Peers Comparison
UnderperformOutperform
Sector (61)
TSE:TCL.B
Transcontinental Inc. Class B
18.82
3.92
26.31%
TSE:DCM
Data Commun Management
1.31
-1.11
-45.87%
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.