Brian Acker, CA Air Canada AC-T DON'T BUY Mar 14, 2023

Deferred capex, a positive. Flexibility with its fleet. Strong balance sheet. Under 6x PE, way cheaper than US peers. Softness this year due to tariff uncertainty, sees growth returning in next couple of years. If tariffs don't go on, a nice buy. Put it in a non-registered account as more of a trading stock.

Airlines are economically sensitive stocks. Technically, the chart shows a base, which suggests a swing trade. If, and only if, AC arcs up with definite conviction off support of $15 or so, it could head close to $24 (though might not quite make it).

Don't do it until it breaks out. Plus, you'll need a fundamental reason (such as Trump backing off tariffs).

It has rebuilt its balance sheet and the valuation is well below the historical average. It has lagged the U.S. airline stocks even though it has initiated a 12 month share buyback program. It is at a lower price today than the price for share buybacks, recent option offerings and insider buying in February. Travel should come off a bit but not as much as the drop in its stock price.         Buy 13  Hold 4  Sell 0

Airline stocks are not long-term holds. Travel is discretionary, especially for pleasure. Most profitable part is business travel, which won't make a full recovery to pre-Covid levels. Air travel to US is suppressed. CAD at this low level doesn't bode well for overseas purchasing power. Massively leveraged balance sheet, plus looming tariffs.

Over last 5 years, hasn't generated much stock price appreciation. Trading stock, not buy and hold. New capacity coming to market, consumer being more cautious. Not great environment to buy. Cashflow will be under pressure.

One of the most economically sensitive names. To buy now, you need a rosy economic outlook but uncertainty is squashing that. Valuation's come down massively. High fixed costs. Not enough defense as we stare down a recession.

A high-risk opportunity. Traffic to US is down. In the US travel is down, but revenues are up because people are paying for executive class. AC can do the same thing. Tariff noise will soon abate.

Airlines are a a very tough business to invest in. Highly volatile, highly levered. Not for him. He likes recurring revenue, visibility on revenue, and easy to play. You're flipping a coin.

It is trading near the levels seen at the early stages of the pandemic. Trade war fears have dragged down the airlines but this is overdone. Air Canada is at an 80% booking level which is normal. Its flights to the U.S. are down but international business is strong. It makes more money on international flights than domestic. The price is still OK.                             Buy 14  Hold 2  Sell 1