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Transcontinental
(TSX:TCL.A)
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Rating:60Neutral
Price Target:
C$5.00
▼(-9.42% Downside)
Action:Reiterated
Date:09/12/26
The score is driven primarily by mixed financial quality in the latest period (revenue contraction, lower gross margin, higher leverage snapshot and potential one-time profitability signals), partially offset by positive longer-term profitability/FCF. Technicals remain weak with bearish trend signals despite oversold readings. Valuation is optically cheap on P/E but the unusually high stated dividend yield reduces confidence in valuation support, while earnings-call guidance and sentiment are moderately constructive for fiscal 2026 but include meaningful uncertainties (cash flow and raddar profitability).
Positive Factors
ISM growth and integration synergies
ISM's 38% revenue growth, nearly 7% organic growth and ahead-of-plan integration indicate that acquired platforms are adding both scale and operating synergies. This supports a more growth-oriented mix and gives management a repeatable path to expand earnings beyond declining legacy activities.
Negative Factors
Revenue and gross-margin contraction
TTM revenue fell 19.41% and gross margin dropped to about 28.7% from roughly 45%-50% in prior annual periods, while operating margin remained about 7.9%. This combination signals pressure on core economics and makes durable earnings power harder to assess.
Read all positive and negative factors
Positive Factors
Negative Factors
ISM growth and integration synergies
ISM's 38% revenue growth, nearly 7% organic growth and ahead-of-plan integration indicate that acquired platforms are adding both scale and operating synergies. This supports a more growth-oriented mix and gives management a repeatable path to expand earnings beyond declining legacy activities.
Read all positive factors
Transcontinental (TCL.A) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$455.45M
Dividend Yield421.81%
Average Volume (3M)231.21K
Price to Earnings (P/E)1.2
Beta (1Y)0.18
Revenue Growth-43.09%
EPS Growth91.71%
CountryCA
Employees7,600
SectorConsumer Cyclical
Sector Strength84
IndustryPackaging & Containers
Share Statistics
EPS (TTM)4.01
Shares Outstanding74,112,650
10 Day Avg. Volume208,107
30 Day Avg. Volume231,212
Financial Highlights & Ratios
PEG Ratio0.22
Price to Book (P/B)0.86
Price to Sales (P/S)0.60
P/FCF Ratio6.72
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$7.50Price Target Upside35.87% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)1.04
Revenue Forecast (FY)C$1.16B
Transcontinental Business Overview & Revenue Model
Company Description
Transcontinental Inc. primarily operates in the flexible packaging industry across a wide international footprint, including Canada, the United States, Latin America, the United Kingdom, Australia, and New Zealand. The company's diverse business a...
How the Company Makes Money
Transcontinental makes money primarily by manufacturing and selling packaging products, with revenue largely generated from producing flexible packaging (e.g., films, laminates and related converting services) for brand owners and other customers ...
Transcontinental Earnings Call Summary
Earnings Call Date:Sep 09, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Dec 09, 2026
Earnings Call Sentiment Positive
The call was broadly positive. Management highlighted year-over-year revenue, adjusted EBITDA and EPS growth, strong ISM organic performance, ahead-of-plan integration, the completed raddar rollout, improving leverage and confidence in the fiscal 2026 outlook. These positives outweighed challenges including lower traditional volumes, the Books and Education decline, lower operating cash flow, higher tax expense, the foreign exchange loss and uncertainty regarding raddar profitability and the 2027 outlook.Positive Updates
Confidence in Fiscal 2026 Outlook
Management said the improved third-quarter performance reinforces its confidence in closing fiscal 2026 in line with the financial outlook and expects adjusted EBITDA for fiscal 2026 to be in line with the previous year.
Negative Updates
Lower Traditional Activity Volumes
Consolidated revenue and adjusted EBITDA growth were partially offset by lower volume in traditional activities, particularly traditional flyer printing.
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Q3-2026 Updates
Positive
Negative
Confidence in Fiscal 2026 Outlook
Management said the improved third-quarter performance reinforces its confidence in closing fiscal 2026 in line with the financial outlook and expects adjusted EBITDA for fiscal 2026 to be in line with the previous year.
Read all positive updates
Company Guidance
Management remains confident in its ability to close fiscal 2026 in line with its financial outlook, including generating adjusted EBITDA for fiscal 2026 in line with the previous year, an effective tax rate in the mid-20s, and CapEx of about $60 million for the full year; it expects an important portion of the negative working capital year-to-date to reverse in the fourth quarter, bringing net debt to around 1.75x for year-end, with Books and Education expected to recover in the fourth quarter and deliver year-over-year flat, while the 2 remaining buildings are expected to sell over the next 12 months and together reach the original target of $100 million.Transcontinental Financial Statement Overview
Summary
Income Statement
66
Positive
Balance Sheet
54
Neutral
Cash Flow
57
Neutral
| Breakdown | TTM | Oct 2025 | Oct 2024 | Oct 2023 | Oct 2022 | Oct 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.57B | 2.74B | 2.81B | 2.94B | 2.96B | 2.64B |
| Gross Profit | 451.20M | 1.37B | 1.38B | 1.36B | 1.32B | 1.25B |
| EBITDA | 230.20M | 474.50M | 416.30M | 391.70M | 447.50M | 450.00M |
| Net Income | 335.60M | 171.00M | 121.30M | 85.80M | 141.20M | 130.60M |
Balance Sheet | ||||||
| Total Assets | 1.24B | 3.35B | 3.64B | 3.70B | 3.80B | 3.61B |
| Cash, Cash Equivalents and Short-Term Investments | 14.70M | 47.00M | 185.20M | 137.00M | 45.70M | 231.10M |
| Total Debt | 440.50M | 787.40M | 989.00M | 1.06B | 1.15B | 1.13B |
| Total Liabilities | 817.80M | 1.43B | 1.73B | 1.79B | 1.92B | 1.85B |
| Stockholders Equity | 418.20M | 1.91B | 1.91B | 1.90B | 1.88B | 1.76B |
Cash Flow | ||||||
| Free Cash Flow | 111.80M | 245.60M | 275.30M | 277.50M | 69.00M | 168.00M |
| Operating Cash Flow | 152.10M | 314.90M | 370.40M | 422.80M | 186.10M | 283.00M |
| Investing Cash Flow | -65.90M | 11.00M | -112.60M | -165.20M | -257.40M | -181.00M |
| Financing Cash Flow | -2.15B | -470.40M | -214.70M | -166.80M | -116.20M | -117.80M |
Transcontinental Technical Analysis
Negative
5.52
Price Trends
5.42
Negative
5.31
Negative
4.48
Positive
Market Momentum
-0.07
Positive
30.26
Neutral
24.36
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TCL.A, the sentiment is Negative. The current price of 5.52 is above the 20-day moving average (MA) of 5.42, above the 50-day MA of 5.42, and above the 200-day MA of 4.48, indicating a neutral trend. The MACD of -0.07 indicates Positive momentum. The RSI at 30.26 is Neutral, neither overbought nor oversold. The STOCH value of 24.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:TCL.A.
Transcontinental Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | C$914.55M | 23.52 | 11.67% | 1.41% | 15.72% | ― | |
67 Neutral | C$872.79M | 19.42 | 15.18% | 2.90% | 8.97% | 27.62% | |
65 Neutral | C$534.77M | 25.02 | 7.89% | 2.86% | 46.60% | -4.27% | |
62 Neutral | C$150.16M | 30.57 | 10.60% | 4.17% | -4.58% | -36.77% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
60 Neutral | C$455.45M | 1.21 | 29.10% | 421.81% | -43.09% | 91.71% |
* Consumer Cyclical Sector Average
TSE:TCL.A
Transcontinental
5.12
2.35
85.04%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.