Air Canada (TSE:AC) stock flew 11.6% today following the airline’s recently-upgraded 2023 guidance due to elevated demand, lower fuel costs, and increased traffic. Air Canada now anticipates adjusted EBITDA for 2023 to range between C$3.5 billion and C$4 billion, higher than the previous forecast of C$2.5 billion to C$3 billion.
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National Bank (TSE:NA) analyst Cameron Doerksen emphasized that higher prices are offsetting investor concerns over increased costs. Further, he expects unit costs to fall in 2024 as Air Canada brings capacity closer to 2019 levels. While the company’s 2023 capacity guidance remains relatively unchanged, Air Canada has modified its forecast for adjusted cost per available seat mile, now anticipated to be between 0.5% and 2.5% below 2022 levels. For reference, CASM measures an airline’s operating expenses relative to its available seat miles; the lower, the better.
Air Canada’s updated outlook assumes moderate Canadian GDP growth this year, an average USD/CAD exchange rate of $1.34, and an average jet fuel price of C$1.09 per litre.
Is AC Stock a Buy, According to Analysts?
According to analysts, Air Canada earns a Strong Buy consensus rating based on seven Buys and one Hold rating assigned in the past three months. The average Air Canada stock price target of C$28.76 implies 40.4% upside potential.
If you’re wondering which analyst you should follow if you want to buy and sell AC stock, the most accurate analyst covering the stock (on a one-year timeframe) is Tim James of TD Securities, with an average return of 26.17% per rating and a 65% success rate. See below.
