Is Transat A.T. stock a buy right now?

Following the company’s first quarter results, Desjardins analyst Benoit Poirier has trimmed his price target on Transat A.T. (Transat A.T. Stock Quote, Chart, News, Analysts, Financials TSX:TRZ)

On March 13, TRZ reported its Q1, 2025 results. The company posted Adjusted EBITDA of $20.0-million on revenue of $829.5-million, a topline that was up 5.6%, year-over-year.

“The first quarter of fiscal 2025 ended with a better performance compared to the same period last year despite economic uncertainty,” CEO Annick Guérard said. “Higher traffic and a disciplined capacity increase of 0.5% resulted in a yield improvement of 1.7% year-over-year. Transat’s financial results also progressed with revenue growing 5.6% from the first quarter last year and adjusted EBITDA totaling $20.0 million driven by reduced fuel costs and a tight control on operating expenses.”

The analyst says visibility on this stock is not quite what it once was.

“While TRZ has not been directly impacted by increased Canada-U.S. hostility given its limited exposure to the U.S. end market, we remain conservative with our estimates given some of the potential indirect effects of the volatility — a depreciating loonie (negatively impacts fuel, leasing and airport costs) and weaker consumer confidence, which could impact future travel demand,” Poirier wrote. “Analyzing the weak 1Q results of some US airlines, it appears that the macro uncertainty has already begun to impact the industry.”

As reported by the Globe and Mail, the analyst March 18 cut his price target on the stock from $2.25 to $2.00, while maintaining his “Hold” rating. The stock closed March 17 at $1.55.

“We prefer to remain on the sidelines as we await additional deleveraging as well as execution of the strategic plan,” the analyst concluded.