Exchange Income Corp (EIF:CA)
TD Cowen increased its 12-month target price on Exchange Income Corp following an upward revision to its earnings and cash flow forecasts, reflecting stronger operational execution and enhanced visibility from newly secured long-term contracts. The analyst noted that the acquisition of Canadian North, combined with continued momentum in the company’s aerospace, aviation services, and manufacturing segments, has meaningfully expanded its recurring revenue base and geographic diversification.
Recent quarterly results demonstrated above-consensus EBITDA and cash flow per share, supported by improved utilization rates in regional aviation, robust demand for medevac and essential air services in Northern Canada, and sustained strength in manufacturing and infrastructure services. TD Cowen emphasized that EIF’s integrated model, which involves balancing stable aviation cash flows with cyclical manufacturing upside which provides a natural hedge against macroeconomic volatility, reinforcing its defensive investment profile.
The firm also underscored management’s disciplined capital allocation strategy, noting a consistent track record of accretive acquisitions, conservative leverage management, and maintenance of a sustainable dividend payout ratio. With free cash flow yields exceeding 10%, the dividend remains well-covered, and management retains ample capacity for reinvestment and balance sheet flexibility.
TD Cowen believes EIF is well-positioned to capture incremental growth opportunities in infrastructure renewal, defense contracts, and specialized aviation logistics across North America. These drivers, coupled with expected synergies from the Canadian North integration, are projected to support double-digit annualized EPS growth through 2026.
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