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On Thursday, BMO Capital Markets adjusted its outlook on Air Canada (TSX:AC:CN) (OTC: ACDVF), reducing the airline’s price target from Cdn$31.00 to Cdn$29.00, yet maintaining an Outperform rating on the stock. The revision reflects a more cautious stance in the face of growing macroeconomic risks, particularly those stemming from trade policy uncertainties.
The BMO analyst underscored that despite the broader market’s increasingly bearish sentiment towards Air Canada, the fundamentals of the airline remain strong both in the near-term and looking further ahead. This sentiment is grounded in the belief that Air Canada’s strategic initiatives are still on track to add substantial value.
In December 2024, Air Canada outlined a strategic plan aimed at enhancing its operational performance and financial strength. BMO’s analyst believes that the execution of this plan will be a key driver of value for Air Canada, despite the recent adjustments to the price target reflecting near-term market challenges.
The analyst from BMO Capital Markets noted that the reduced price target to Cdn$29.00 from the previous Cdn$31.00 is a minor tweak based on the forecast adjustments. However, the firm’s Outperform rating remains unchanged, indicating a continued positive outlook on Air Canada’s shares.
BMO’s commentary provides a perspective that, even with the heightened macroeconomic risks, Air Canada’s strategic plan laid out in December 2024 has the potential to significantly enhance shareholder value. The firm’s revised price target and sustained Outperform rating suggest a confidence in the airline’s ability to navigate through the current uncertainties and emerge stronger.
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