Morningstar Forecasts 30 Percent Upside for Air Canada’s (AC:TSX) Stock

Analyst Ratings Coverage

Morningstar(Rank#123), just released a research report, updating coverage on  Air Canada’s stating that the stock has the potential to rise over 30 percent to $27 per share within a 12-month period. The firm has also maintained its “Buy” rating on Air Canada’s stock.

According to the report, Air Canada’s strong financial performance and strategic initiatives position the airline for long-term growth. The report notes that Air Canada has a strong market position in both domestic and international markets, with a diverse route network and a well-established loyalty program, Aeroplan. The report also highlights the airline’s cost-reduction initiatives, including its fleet renewal program, which should help improve profitability.

The report goes on to state that the ongoing COVID-19 pandemic has previously impacted Air Canada’s financial performance, but the airline is well-positioned to enter a period of growth. The report notes that Air Canada has a strong balance sheet and has taken steps to improve liquidity, including reducing capital expenditures and securing additional financing. The report also notes that Air Canada has taken measures to improve its operations, including implementing new safety protocols and optimizing its route network.

Morningstar’s bullish outlook on Air Canada’s stock is supported by other analysts in the industry. The consensus among analysts is a “Buy” rating, with an average price target of $26.20 per share. This represents a potential upside of over 25 percent from the current trading price.

Investors who are considering investing in Air Canada’s stock should keep in mind that investing in airline stocks can be volatile due to the cyclical nature of the industry and external factors such as fuel prices and geopolitical events. However, the airline industry is expected to recover as travel demand picks up, and Air Canada’s strong financial position and strategic initiatives position the company for long-term growth.

Morningstar’s recent  analyst report and guidance on Air Canada’s stock is a positive sign for investors who are considering investing in the airline industry. With a potential upside of over 30 percent, Air Canada’s stock is a promising investment opportunity for those who are willing to take on some risk in exchange for potential returns.

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