# Air Canada (AC.TO) fundamentals

Data as of 2026-09-08. TSX, Canada. Sector: Industrials / Airlines. Price C$28.72, market value C$8.0 billion.

## Valuation
- **P/E (trailing): 21.9×** (5-yr avg 6.1×, 3-yr avg 6.1×). Air Canada trades at 21.9× trailing earnings, well above its own five-year average of 6.1×: investors are paying up relative to the company's past. The Industrials median in the September 2026 study was 25.7×. Forward P/E is 12.4×, lower than trailing, so analysts expect earnings to grow.
- **Price / sales: 0.3×**. Each dollar of revenue is priced at 0.3×, a low multiple typical of thin-margin businesses or out-of-favour stocks.
- **Price / book: 3.0×**. The shares trade at 3.0× book value; book value is a meaningful part of the valuation.
- **EV / EBITDA: 4.3×**. Enterprise value is 4.3× operating earnings before depreciation, the multiple that ignores how the company is financed; below 8× is inexpensive for most sectors.
- **Free-cash-flow yield: 12.6%** (5-yr avg 8.5%). Free cash flow equals 12.6% of the market value, above its five-year average of 8.5%, so the shares are cheaper on cash than they have usually been. Above 5% is generally attractive.
- **Earnings yield: 4.6%**. The inverse of the P/E: 4.6% of the price is earned each year.

## Profitability
- **Gross margin: 27.9%**. Air Canada keeps 27.9% of revenue after the direct cost of what it sells.
- **Operating margin: 2.2%**. 2.2% of revenue is left after running the business, which leaves little cushion in a downturn.
- **Net margin: 2.9%**. 2.9% of each dollar of sales reaches the bottom line.
- **Return on equity: 24.9%**. 24.9% on shareholders' equity is excellent if it is not driven by leverage; sustained above 20% usually signals a competitive advantage.
- **Return on invested capital: 3.8%**. Return on all capital, debt included, is 3.8%: close to or below the cost of capital, so growth may not create value.
- **Return on assets: 1.4%**. Each dollar of assets produces 1.4% of profit.

## Growth
- **Revenue growth (1 yr): 0.5%** (3-yr 10.6%/yr, 5-yr 30.8%/yr). Revenue grew 0.5% over the last year, against 30.8% a year compounded over five years: growth is slowing.
- **EPS growth (1 yr): -60.4%**. Earnings per share fell 60.4%, slower than revenue, so margins compressed.
- **Free-cash-flow growth (3 yr): -2.1%/yr**. Free cash flow has compounded at -2.1% a year over three years.

## Financial health
- **Debt to equity: 4.47**. Debt is 4.47 times equity, a leveraged balance sheet that needs steady cash flow to service.
- **Net debt / EBITDA: 1.8×**. It would take 1.8 years of operating earnings to repay net borrowings, within the comfortable range.
- **Interest coverage: 0.9×**. Operating profit covers interest only 0.9×: fragile.
- **Current ratio: 0.56** (quick 0.53). Current liabilities exceed current assets, so the company depends on ongoing cash generation or refinancing to pay the next year's bills.
- **Altman Z-score: 0.86**. A Z-score of 0.86 is in the distress zone, a signal to examine the balance sheet closely.
- **Piotroski F-score: 7/9**. 7 of 9 fundamental checks pass: strong and improving financials.

## Dividends
- **Dividend: none**. Air Canada does not currently pay a dividend, but it returned 3.7% of its market value through buybacks over the last year.

## Analyst view
- **Analyst consensus: buy** (14 analysts). 14 analysts cover Air Canada; the consensus is buy, with an average price target of C$34.89 (+21% from the current price). Analyst opinion is shown for context; it is not part of the Fundamental Score.

## Price and momentum
- **Total return (1 yr): 50.5%** (YTD 48.9%, 3-mo 34.1%). The shares are up 50.5% over twelve months including dividends.
- **From 52-week high: -8.7%** (74.6% above the low). Trading 9% below its 52-week high.
- **200-day average: above**. The price sits above its 200-day moving average, the usual definition of an uptrend.
- **RSI (14-day): 59**. An RSI of 59 is neutral.
- **Beta (1 yr): 0.89** (volatility 35%). Beta of 0.89 against the S&P/TSX Composite: the shares move roughly with the market.

Live score and charts: https://foliofundamentals.com/analyzer?s=AC.TO · Page: https://foliofundamentals.com/stocks/ac.to

Not investment advice.