Gold prices steady ahead of Fed decision, Trump’s tariff deadline
On Friday, Scotiabank (TSX:BNS) analysts downgraded Transcontinental Inc (TSX:TCLa). stock from Sector Outperform to Sector Perform. The analysts adjusted the price target to Cdn$23.25 from the previous Cdn$22.00.
The downgrade follows a year of strong performance for Transcontinental shares, attributed to management’s efforts in realigning cost structures and improving margins. This transformation led to an increase in the stock’s EV/EBITDA multiple, despite flat to slightly declining organic revenue growth.
Analysts noted that further growth in Transcontinental’s packaging segment would require a significant and sustainable increase in organic revenue. This objective involves capturing market share from competitors in a highly competitive environment. The packaging business is currently valued at 7.5x, while peers in the industry trade at 9-10x, indicating potential for valuation growth.
Scotiabank highlighted that while Transcontinental’s peers are experiencing sustainable growth rates of 3-5%, the company is expected to maintain flat organic revenue growth in its packaging segment for 2025. The analysts expressed their intention to reassess their view on the shares as the year progresses.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.