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Transcontinental
(TSX:TCL.A)
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Rating:61Neutral
Price Target:
C$5.50
▼(-0.36% Downside)
Action:Reiterated
Date:09/06/26
The score is driven primarily by mixed fundamentals: strong margins but a sharp TTM revenue decline, weakening free cash flow, and a notably more leveraged balance sheet. Valuation appears exceptionally low on the provided P/E and dividend yield, which lifts the overall score, while technicals are neutral-to-weak with the stock below key short-term averages and slightly negative MACD.
Positive Factors
Strong profitability
Strong TTM net and EBITDA margins indicate that Transcontinental continues to convert sales into meaningful earnings despite operating pressure. This profitability provides internal funding capacity and can support resilience, investment, and customer service over the next several quarters.
Negative Factors
Sharp revenue decline
The sharp TTM revenue contraction, following earlier declines, signals sustained pressure on the company’s top line rather than an isolated quarterly movement. Persistent volume or mix weakness could reduce operating leverage and make it harder to preserve earnings and fund future growth.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong profitability
Strong TTM net and EBITDA margins indicate that Transcontinental continues to convert sales into meaningful earnings despite operating pressure. This profitability provides internal funding capacity and can support resilience, investment, and customer service over the next several quarters.
Read all positive factors
Transcontinental (TCL.A) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$462.87M
Dividend Yield381.75%
Average Volume (3M)223.37K
Price to Earnings (P/E)1.3
Beta (1Y)0.16
Revenue Growth-29.78%
EPS Growth88.96%
CountryCA
Employees7,600
SectorConsumer Cyclical
Sector Strength84
IndustryPackaging & Containers
Share Statistics
EPS (TTM)4.03
Shares Outstanding74,112,650
10 Day Avg. Volume221,069
30 Day Avg. Volume223,367
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$7.67Price Target Upside38.89% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)1.11
Revenue Forecast (FY)C$1.14B
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:Dec 10, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Sep 09, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. While there was notable growth in safety metrics and adjusted net earnings, challenges such as decreased Q4 revenues and the impact of the Canada Post labor conflict were significant. The sale of the packaging sector and strategic acquisitions offer potential for future growth.Positive Updates
Improvement in Safety Metrics
The company achieved a 39% reduction in accidents year-over-year, following a 9% reduction between 2024 and 2023.
Negative Updates
Decrease in Fourth Quarter Revenue
Q4 revenues decreased by 2.3% to $732.4 million due to lower retail services and printing volumes and the sale of industrial packaging operations.
Read all updates
Q4-2025 Updates
Positive
Negative
Improvement in Safety Metrics
The company achieved a 39% reduction in accidents year-over-year, following a 9% reduction between 2024 and 2023.
Read all positive updates
Company Guidance
During the TC Transcontinental Fourth Quarter and Fiscal Year 2025 Results Conference Call, the company provided guidance highlighting several key metrics. The company reported a 10.7% year-over-year increase in net earnings per share for fiscal 2025, marking the fourth consecutive quarter of improvement. Revenue for the fourth quarter was $732.4 million, reflecting a 2.3% decrease from the previous year, attributed to lower volumes in the retail services and printing sector and the sale of industrial packaging operations. Despite this, the packaging sector showed organic revenue growth of 2.8% and a 3.3% increase in adjusted EBITDA to $67.9 million. For fiscal 2026, TC Transcontinental expects stable adjusted EBITDA compared to 2025, with anticipated growth in the ISM activities and media business. The company plans to use proceeds from the sale of its packaging business for a distribution of approximately $20 per share to shareholders, alongside a reduction in net debt, targeting a pro forma net debt ratio of about 1.7x post-transaction. Capital expenditures for 2026 are projected to be around $60 million, and cash taxes are expected to be approximately $30 million. Overall, the company remains focused on aligning corporate costs with business size and anticipates a full impact of cost reductions by fiscal 2027.Transcontinental Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
46
Neutral
Cash Flow
52
Neutral
| Breakdown | TTM | Oct 2025 | Oct 2024 | Oct 2023 | Oct 2022 | Oct 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.95B | 2.74B | 2.81B | 2.94B | 2.96B | 2.64B |
| Gross Profit | 752.60M | 1.37B | 1.38B | 1.36B | 1.32B | 1.25B |
| EBITDA | 277.80M | 474.50M | 416.30M | 391.70M | 447.50M | 450.00M |
| Net Income | 337.40M | 171.00M | 121.30M | 85.80M | 141.20M | 130.60M |
Balance Sheet | ||||||
| Total Assets | 1.20B | 3.35B | 3.64B | 3.70B | 3.80B | 3.61B |
| Cash, Cash Equivalents and Short-Term Investments | 8.80M | 47.00M | 185.20M | 137.00M | 45.70M | 231.10M |
| Total Debt | 444.90M | 787.40M | 989.00M | 1.06B | 1.15B | 1.13B |
| Total Liabilities | 815.10M | 1.43B | 1.73B | 1.79B | 1.92B | 1.85B |
| Stockholders Equity | 386.80M | 1.91B | 1.91B | 1.90B | 1.88B | 1.76B |
Cash Flow | ||||||
| Free Cash Flow | 136.10M | 245.60M | 275.30M | 277.50M | 69.00M | 168.00M |
| Operating Cash Flow | 200.40M | 314.90M | 370.40M | 422.80M | 186.10M | 283.00M |
| Investing Cash Flow | -116.20M | 11.00M | -112.60M | -165.20M | -257.40M | -181.00M |
| Financing Cash Flow | -2.16B | -470.40M | -214.70M | -166.80M | -116.20M | -117.80M |
Transcontinental Technical Analysis
Positive
5.52
Price Trends
5.44
Negative
5.32
Positive
4.44
Positive
Market Momentum
>-0.01
Positive
47.31
Neutral
11.55
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TCL.A, the sentiment is Positive. The current price of 5.52 is above the 20-day moving average (MA) of 5.43, above the 50-day MA of 5.44, and above the 200-day MA of 4.44, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 47.31 is Neutral, neither overbought nor oversold. The STOCH value of 11.55 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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$901.77M | 23.16 | 11.67% | 1.43% | 15.72% | ― | |
67 Neutral | C$869.04M | 19.59 | 15.18% | 2.88% | 8.97% | 27.62% | |
65 Neutral | C$553.75M | 25.70 | 7.89% | 2.78% | 46.60% | -4.27% | |
62 Neutral | C$161.42M | 32.87 | 10.60% | 3.88% | -4.58% | -36.77% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | C$462.87M | 1.33 | 22.24% | 381.75% | -29.78% | 88.96% |
* Consumer Cyclical Sector Average
TSE:TCL.A
Transcontinental
5.24
2.43
86.74%
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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.