Air Canada (AC.TO)

Revenge travel. Higher highs and higher lows remain. Fundamentals and technicals align. If it can take out the highs from 2021, which it's in the process of testing, there's upside to the next major resistance level of $40. Potential to double in the next 2 years.

Airline stocks are trading vehicles at best, not long-term investments. Very cyclical. Costs like fuel and labour are beyond their control. Lower fuel costs are a tailwind, and demand is strong right now. 

Believes travel demand to continue to recover.
Recent 52 week high on stock price - expecting further growth.
US/Canada routes highest in Canada. 
Trading at 8x P/E.
Free cash flow growing at a high rate.
Expecting $30 share price within next 2-3 years. 

Has a $29 price target. Delta announced great numbers, but pilots demand higher wages. AC is cheaper than US peers, and fuel costs are declining. 2023-5 he sees 79% growth rate, and trades at 6x PE. Don't own it forever, but can buy now. It will hit $30.

It is making higher highs and higher lows since its bottom in mid 2022. Its point of resistance is coming up and it needs to break its early 2022 peak.

Not a good investment.
Airline business very hard.
High capital requirements. 
Demand for travel not enough to create profitable business.
Leisure travel does not earn enough. 

Terrible business. Would never invest in airlines again. Massive fixed costs with new planes, huge debt load, huge pensions. Management's done a great job.

Airline stocks are starting to move and are halfway back from pre-pandemic. There is still upside but he has switched to Delta which has more upside and conviction. Delta doesn't issue more stock so there is little dilution. It is the highest payer of pilots and in fact just gave them a 30% raise.

Does not own shares.
Very tough business with high costs.
Recession will not be good for travel industry.
Would not recommend buying. 

They have gone bankrupt twice in the past. With airlines you must buy at the right time in the cycle and now is a good time to buy Air Canada with a 24% growth EPS. It now has a better balance sheet and is much cheaper than its U.S. peers. Margins should do better. Cost inflation is a concern

Worth $50 a share, but they put on $15 per share of debt. His target price is the low $30s. Seeing incredible recovery in cashflows, though it depends on how long the post-recovery boom lasts. Well managed. Canada's economy will be growing faster than others.

The airlines have been hit hard but the stocks are still down despite the recovery in travel. He owned it but has switched to another airline stock - see Top Picks. It still has upside but results can be a bit spotty.

Not a very good business for investors.
High capital costs with low margins.
Not a great investment.
Would avoid.

Great pricing power, especially here in Canada. Cost headwinds. People are travelling more. Great job on service quality. A difficult, cyclical business long term. 

Looks great. Fundamentally, looks attractive. Looking at the chart, next target is just above $21, and then $24.50 after that. Another 10-20% upside from these levels.

Longer term trend is down. Airlines are very cyclical. He believes we're in a new 4-year cycle with upside until late 2025/early 2026. A lot of the cyclicals should participate. If energy remains in a range, at least it won't be a headwind for airlines.