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Opinions Gerard Ferguson
Air CanadaAC.TOHOLDAug 09, 2016
Gerard FergusonStock price when the opinion was issued
As of Jun 16, 2026. Market Open.
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Travel stocks and airlines are very economically sensitive. Oil prices are spiking but Air Canada is better positioned due to Canada's energy supply. He likes it because it is building out a very strong global network with very unique routes that other carriers don't have. Trades at a discount to its US counterparts so there is lots of upside if the economy allows it. The next catalyst is bringing in a great CEO. Has a strong bench with a management team that has been there for a long time. Navigating the 2030's and beyond is the next big question for Air Canada.
Jamie Murray 
Its planes are fuller now and the balance sheet much better. The stock price had started to improve but war and higher oil prices are bringing the price back down. There is still upside since it is trading at a discount to its historical valuation and to its US counterparts. He feels a fairer price would be $25.
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Premium contentOur PAST TOP PICK with AC has triggered its stop at $18. To remain disciplined, we recommend covering the position at this time. When combined with previous guidance, this will result in a net investment gain of 1%.
Premium contentArbitrators settled the flight attendant wage dispute -- mostly in favour of the company. Now they can get back to business. Issues in Mexico will undoubtably impact short term operations, but share price pullback makes this a good entry. We like that cash reserves are growing while debt is aggressively retired and shares bought back. Its trading at 11x earnings, 2.3x book and supports a ROE of 25%. We recommend maintaining a stop at $18, looking to achieve $26 -- upside potential of 26%. Yield 0%
(Analysts’ price target is $26.31)Airline stocks have been hit by energy prices as well as tariff effects. Definitely on her watchlist. Progress operationally since pandemic, execution has improved. Balance sheet healthier. Demand remains solid, especially internationally.
Cautious on capacity growth. Cyclical industry. Near-term costs moving higher. She's watching demand trends and price discipline.
Premium contentWe reiterate AC as a TOP PICK. Slowly, the airline is winning over customers from ONYX owned WestJet thru better pricing, more complimentary services and overall better customer satisfaction. It trades at 8x earnings and under 3x book. It is prudently using some cash reserves to aggressively retire debt and buy back shares. We recommend trailing up the stop (from $16) to $18, looking to achieve $25 -- upside potential of 28%. Yield 0%
(Analysts’ price target is $25.00)Premium contentWe reiterate AC as a TOP PICK. The airline has announced a direct flight to Rio in Brazil, highlighting how Canadians are looking abroad for travel. We like that it trades at 8x earnings and 2.5x book value. Cash reserves are prudently being used to aggressively retire debt and buy back shares. We continue to recommend a stop at $16.00, looking to achieve $22.50 - upside potential of 18%. Yield 0%
(Analysts’ price target is $24.69)#1 would probably be Telus. BCE is also in there. Names like AC, MFI, PRL, GSY, WFG, and TFII. All of these stocks are cheaper than they ought to be. All things being equal, those names should be higher in January than they are now.
You make a lot or lose a lot of money with AC. A great stock that should be higher, but has been his by the strike and geopolitical forces. Those are behind them. Business has picked up and will do will. This is a $30-40 stock.
Bruce MurrayHe got rid of it due to the choppy chart. Airlines are labour-intensive, subject to strikes, have high fuel costs, sensitive to the economy.
Chart's showing it's neither here nor there. If it broke a bit below where it is now, as part of a longer-term downtrend, could easily see $10 range and you'd be best to sell and redeploy $$ elsewhere. Reasonable dividend.
if there is a resolution of the strike it could bounce back, but when. It has bought back 18% of its shares so it could be a $25 stock with fewer shares. Over the last five years it has been range bound but with wide oscillations. He sees it as a trading opportunity.
Teal LindeHe does not really take an interest in airlines. There may be an opportunity now for Air Canada with all the rhetoric around the strike. It's been around for some time. Settlement should not be a huge number for cost increases. It is looking to expand internationally. You could buy when the strike is settled and the price starts to rise.
Premium contentIf you can wrap your head around buying at the time of a potential labour strike - we reiterate AC is a TOP PICK. With strong demand for international and domestic travel, we don't expect this dispute to be long lasting. It trades at 10x earnings, 3.3x book and supports a robust 99% ROE. Cash reserves are growing, while the company has aggressively retired debt. We continue to recommend a stop at $16, looking to achieve $26 -- upside potential over 30%. Yield 0%
(Analysts’ price target is $25.74)
This has always been a leveraged play. On one hand, fuel is probably their 2nd largest input cost. You would think that with fuel prices dropping it would be good for them. It is good globally for airlines, but with fuel prices dropping, that means the price of oil is dropping which is bad for Canada. The company has been fighting fuel prices over the last 18-24 months. They are going to get through it. Have reported quarter after quarter of very good numbers. They have begun deleveraging and have improved their fleet significantly. Where people are concerned is cyclicality. Are we hitting the peak of the cycle? The name is not in favour right now.