So Canadian airline Air Canada (TSE:AC) offered up a projection about its upcoming revenue, and managed to make it look a little rosy, as long as no one looked at it too closely. But investors kicked tires, squinted at body panels, and discovered they were unhappy, abandoning the airline and sending shares down nearly 9% in Tuesday morning’s trading.
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Air Canada looks for a 36% jump in its operating revenue, at least, for its 2028 operating revenue, a Reuters report noted. It looks for “strong demand for leisure travel” to kick in, both domestically and internationally, to help drive those gains. However, the closer-term projections were not quite so optimistic, as Air Canada looked for adjusted earnings for 2025 to come in between C$3.4 billion and C$3.8 billion.
With analysts looking for C$3.6 billion, that may have spooked some investors, who were looking for about an even chance to come in below analyst estimates. But Air Canada overall is looking for “…consistent margin expansion and structural cash generation while maintaining a strong balance sheet and responsible risk profile.”
Opening Up New Routes Can’t Hurt
The good news here, though, is that Air Canada is also looking to open new routes, which will hopefully prompt more ticket sales to get people interested in going to these new places. Just recently, an AviationA2Z report noted, Air Canada has around 40 new destinations planned.
Some of those new destinations include places like Riyadh, as well as destinations in Africa. But what may be the absolute winner is Bengaluru. Since Bengaluru is around 8,019 miles from Montreal, much of Air Canada’s fleet will be able to make the trip without incident. And with substantial numbers of Indians, as well as Africans and some other demographic shifts in Asia, the end result is a real potential gain for Air Canada in bringing them in.
Is Sleep Country a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on TSE:AC stock based on three Buys and three Holds assigned in the past three months, as indicated by the graphic below. After a 26.68% rally in its share price over the past year, the average TSE:AC price target of C$27.17 per share implies 19.42% upside potential.
