Air Canada (AC:CA): JPMorgan Cuts Target on Headwinds

Air Canada (AC:CA)

JPMorgan lowered its 12-month target price on Air Canada (AC:CA) to 26 from 27, citing concerns over rising operating costs and potential headwinds to near-term growth. The investment bank noted that the airline’s updated 2026 unit cost guidance came in higher than expected, suggesting continued pressure from wage inflation, maintenance expenses, and fuel volatility.

The aircraft delivery delays, particularly from Boeing are expected to constrain Air Canada’s capacity expansion plans, limiting its ability to fully capitalize on strong travel demand in both domestic and transatlantic markets. While the airline continues to benefit from robust passenger volumes and improved yield management, JPMorgan believes these cost and supply chain challenges may slow margin recovery and moderate earnings growth through 2026.

Despite the downward revision, JPMorgan maintained a constructive long-term view, highlighting Air Canada’s disciplined capital allocation, fleet modernization strategy, and focus on debt reduction as supportive of the company’s resilience in a competitive global aviation environment.

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