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Investing.com - Raymond James has lowered its price target on Air Canada (TSX:AC) stock to C$25.00 from C$27.00 while maintaining an Outperform rating, citing financial impacts from the recent flight attendant strike.
The firm estimates the strike caused a direct financial impact of C$500 million in the third quarter of 2025, along with an additional C$60 million "book-away" impact as travelers chose other airlines, primarily affecting the same quarter.
Raymond James has reduced its 2025 EBITDA forecast for Air Canada from C$3.5 billion to C$3.0 billion, which falls below the airline’s now-suspended guidance range of C$3.2-3.6 billion. The firm’s 2026 and 2027 EBITDA estimates remain unchanged at C$4.0 billion and C$4.5 billion, respectively.
The investment firm noted it does not expect a meaningful incremental impact from the tentative agreement reached earlier this week, nor does it anticipate longer-term demand effects beyond the near-term booking disruptions.
Despite concerns about limited free cash flow generation through 2027, Raymond James maintained its Outperform rating, citing Air Canada’s "attractive risk-reward, strong (and improving) balance sheet, and diversified network," which it believes will help the airline weather economic challenges better than competitors.
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