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On Monday, BMO Capital Markets maintained its positive stance on Air Canada (TSX:AC:CN) (OTC:ACDVF) shares, reiterating an Outperform rating with a price target of Cdn$29.00. The airline’s first-quarter results for 2025 and its updated full-year 2025 guidance highlight its effective cost management and timely adjustments in capacity, which have supported consistent demand trends across its network. These factors have helped Air Canada navigate external challenges effectively.
According to BMO Capital, Air Canada’s recent earnings release reflects the company’s stronger-than-expected performance in operational execution, particularly in cost control. The airline’s strategic capacity reallocation has been timely and is credited with bolstering demand, which has remained stable despite various external pressures on the industry.
BMO Capital’s analysis suggests that the current stock price of Air Canada, following the earnings announcement, incorporates a sufficient margin of safety. This assessment implies that the stock is undervalued, taking into account the company’s current financial position and market conditions.
The firm also indicated that there could be additional value for shareholders on the horizon. BMO Capital anticipates potential further shareholder distributions, which could act as a catalyst for the stock to achieve a higher valuation in the market.
In conclusion, BMO Capital’s analyst reaffirmed the Outperform rating, expressing confidence in Air Canada’s ability to continue delivering strong financial results and potentially rewarding shareholders, which may contribute to an upward revaluation of the stock in the future.
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