Transcontinental (TCL.A) AI Stock Analysis

• Market Cap: C$1.60B
• Dividend Yield: 9.95%
• Average Volume (3M): 113.04K
• Price to Earnings (P/E): 9.1
• Beta (1Y): 0.90
• Revenue Growth: -2.90%
• EPS Growth: 57.43%
• Country: CA
• Employees: 7,400
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Business Services
• EPS (TTM): 0.70
• Shares Outstanding: 74,112,650
• 10 Day Avg. Volume: 110,534
• 30 Day Avg. Volume: 113,042
• PEG Ratio: 0.29
• Price to Book (P/B): 0.78
• Price to Sales (P/S): 0.53
• P/FCF Ratio: 5.07
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$24.33
• Price Target Upside: 27.45% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 67 Neutral
• Price Target: C$21.00 ▲(10.01% Upside)

Transcontinental's overall stock score is 67, driven by a stable financial position and attractive valuation. However, the score is tempered by revenue decline and cash flow challenges. Positive earnings call sentiment and strategic initiatives in AI and acquisitions provide some optimism, but sector-specific challenges remain.

Positive Factors

Strong Gross Profit Margins

High gross profit margins reflect efficient cost control, which can sustain profitability even in challenging market conditions, supporting long-term financial health.

Retail Services and Printing Sector Growth

Consistent growth in the Retail Services and Printing sector highlights strong market demand and effective execution, contributing to stable revenue streams.

Introduction of Artificial Intelligence

Investing in AI for content automation can enhance operational efficiency and product offerings, positioning the company for future technological advancements.

Negative Factors

Revenue Decline

A substantial revenue decline indicates potential market challenges or operational inefficiencies, which could impact long-term growth prospects if not addressed.

Packaging Sector Revenue Decline

Declining revenues in the Packaging sector suggest competitive pressures or market shifts, which may require strategic adjustments to regain momentum.

Free Cash Flow Challenges

Challenges in free cash flow growth can limit the company's ability to invest in new opportunities or weather economic downturns, affecting long-term financial flexibility.

Transcontinental Business Overview & Revenue Model

Company Description

Transcontinental Inc. engages in the flexible packaging business in Canada, the United States, Latin America, the United Kingdom, Australia, and New Zealand. It operates through Packaging, Printing, and Media sectors. The Packaging sector engages in the extrusion, lamination, printing, and converting packaging solutions; and manufacturing and recycling flexible plastic, including rollstock, bags and pouches, coextruded films, shrink films and bags, and advanced coatings. This sector serves cheese and dairy, coffee and tea, meat and protein, pet food, agriculture, beverage, confectionery, industrial, and consumer product markets, as well as supermarkets. The Printing sector provides integrated services for retailers, such as premedia services, flyer and in-store, and door-to-door marketing product printing distribution, as well as print solutions for newspapers, magazines, 4-color books, and personalized and mass marketing products. The Media sector is involved in printing and digital publishing of educational and trade books, and specialized publications for professionals and newspapers in French and English. Transcontinental Inc. was founded in 1976 and is headquartered in Montreal, Canada.

How the Company Makes Money

Transcontinental Inc. generates revenue through three primary segments: printing, packaging, and media. The printing segment is a significant contributor, providing services to publishers, retailers, and marketers, leveraging high-volume capabilities to produce newspapers, magazines, and marketing collateral. The flexible packaging segment is another vital revenue stream, where the company designs and manufactures packaging solutions for consumer products, focusing on sustainability and innovation to meet client needs. The media segment, although a smaller portion of the business, still contributes by monetizing content through advertising, subscriptions, and events. Strategic acquisitions and partnerships in both the printing and packaging sectors have bolstered Transcontinental's market position and expanded its client base, further driving revenue growth.

Transcontinental Financial Statement Overview

Summary

Transcontinental's financial statements present a mixed picture. Strong gross profit margins and a stable balance sheet with moderate leverage are positive, but significant revenue and free cash flow growth declines raise concerns. The company needs to address revenue growth challenges to enhance profitability and cash flow generation.

Income Statement

Transcontinental's income statement shows a mixed performance. The TTM data reveals a gross profit margin of 49.82%, which is strong, indicating efficient cost management. However, the net profit margin is relatively low at 6.52%, suggesting limited profitability. The company has experienced a significant revenue decline of 56.2% in the TTM period, which is concerning. EBIT and EBITDA margins have improved over the previous year, reflecting better operational efficiency.

Balance Sheet

The balance sheet indicates a stable financial position with a debt-to-equity ratio of 0.45, showing moderate leverage. The return on equity (ROE) is 9.49%, which is a positive sign of profitability relative to shareholder equity. The equity ratio stands at 57.33%, suggesting a solid equity base relative to total assets. Overall, the balance sheet reflects a balanced approach to financing with a focus on equity.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth by 6.82% in the TTM period, indicating potential cash flow challenges. The operating cash flow to net income ratio is strong at 0.94, suggesting good cash generation relative to net income. The free cash flow to net income ratio is 0.74, indicating a healthy conversion of net income to free cash flow. Despite the decline in free cash flow growth, cash flow metrics remain relatively stable.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.76B	2.81B	2.94B	2.96B	2.64B	2.57B
Gross Profit	1.38B	1.38B	1.36B	1.32B	1.25B	1.25B
EBITDA	488.20M	416.30M	391.70M	447.50M	450.00M	482.10M
Net Income	176.00M	121.30M	85.80M	141.20M	130.60M	131.70M
Balance Sheet
Total Assets	3.27B	3.64B	3.70B	3.80B	3.61B	3.60B
Cash, Cash Equivalents and Short-Term Investments	35.90M	185.20M	137.00M	45.70M	231.10M	241.00M
Total Debt	826.40M	989.00M	1.06B	1.15B	1.13B	1.17B
Total Liabilities	1.39B	1.73B	1.79B	1.92B	1.85B	1.86B
Stockholders Equity	1.87B	1.91B	1.90B	1.88B	1.76B	1.73B
Cash Flow
Free Cash Flow	266.30M	292.20M	294.80M	78.40M	177.00M	329.50M
Operating Cash Flow	366.70M	413.70M	472.30M	220.80M	315.30M	427.00M
Investing Cash Flow	27.80M	-112.60M	-165.20M	-257.40M	-181.00M	126.40M
Financing Cash Flow	-445.10M	-258.00M	-216.30M	-150.90M	-150.10M	-526.40M

Transcontinental Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 19.09
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 19.09 is below the 20-day moving average (MA) of 19.57, below the 50-day MA of 19.62, and above the 200-day MA of 18.48, indicating a neutral trend. The MACD of -0.07 indicates Positive momentum. The RSI at 36.13 is Neutral, neither overbought nor oversold. The STOCH value of 8.54 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:TCL.A.

Transcontinental Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TCL.A	67 Neutral	C$1.60B	9.12	9.36%	9.95%	-2.90%	57.43%
CGY	66 Neutral	C$586.28M	13,697.30	-0.21%	2.17%	1.44%	-103.80%
GDI	64 Neutral	C$646.47M	18.54	7.32%	―	-0.87%	117.78%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
DCM	53 Neutral	C$73.01M	10.65	17.74%	5.68%	-8.92%	―

Transcontinental Corporate Events

Transcontinental Inc. Reports Q3 2025 Results with Earnings Growth Amid Revenue Decline

Transcontinental Inc. reported a 2.2% decrease in revenues for the third quarter of fiscal year 2025, primarily due to the sale of its industrial packaging operations and lower demand in the Packaging Sector. Despite this, the company achieved a 16.7% increase in adjusted net earnings per share, driven by improved profitability in its Retail Services and Printing Sector and strategic acquisitions. The company remains optimistic about organic growth in earnings for the fiscal year, supported by expected volume growth in several markets.

The most recent analyst rating on ($TSE:TCL.A) stock is a Buy with a C$25.00 price target. To see the full list of analyst forecasts on Transcontinental stock, see the TSE:TCL.A Stock Forecast page.

TC Transcontinental Expands In-Store Marketing Segment with Strategic Acquisitions

TC Transcontinental has acquired Mirazed Inc. and Intergraphics Decal Limited from Canva Group to enhance its in-store marketing segment. This move, following a recent acquisition of Middleton Group, strengthens its leadership in in-store marketing, expanding its capabilities in Quebec and Western Canada. The acquisition aims to accelerate growth in this sector, which generated over $200 million in revenue last fiscal year, leveraging a network of over 1,200 employees across Canada.

The most recent analyst rating on ($TSE:TCL.A) stock is a Buy with a C$23.00 price target. To see the full list of analyst forecasts on Transcontinental stock, see the TSE:TCL.A Stock Forecast page.

TC Transcontinental Expands In-Store Marketing with Middleton Group Acquisition

TC Transcontinental has announced the acquisition of Middleton Group, a provider of retail services and point-of-purchase display solutions, to enhance its in-store marketing activities. This strategic move bolsters TC Transcontinental’s leadership in the Canadian market and aligns with the growing emphasis on in-store customer experiences. The acquisition is expected to bring transformative opportunities for both companies, expanding their capabilities and market reach.

The most recent analyst rating on ($TSE:TCL.A) stock is a Hold with a C$18.00 price target. To see the full list of analyst forecasts on Transcontinental stock, see the TSE:TCL.A Stock Forecast page.