Is Exchange Income Corp a buy?

In a Sept. 11 research note, Paradigm Capital analyst Razi Hasan reiterated a “Buy” rating and $82.00 target on Exchange Income (Exchange Income Stock Quote, Chart, News, Analysts, Financials TSE:EIF), pointing to the company’s mix of defensive and growth characteristics and a near-term catalyst in Australia.

“Overall, we remain encouraged by several growth drivers in place across multiple business lines,” Hasan said. “The company recently announced an upside to its credit facility to help fund future growth, with the ability to return capital to shareholders.”

The Winnipeg-based company operates through aerospace and aviation, as well as manufacturing. Hasan noted that aerospace and aviation are positioned while manufacturing demand is strengthening.

He also flagged an imminent decision from the Australian government on EIC’s bid for a 15-year maritime surveillance contract, which would begin in 2028 and replace the current deal serviced by U.S. operator Leidos Holdings. The existing contract, valued at A$2.6-billion with extensions, runs through 2027.

The proposed contract would require an upfront cash outlay of about $500-million for new aircraft, hangars, technology and pilot recruitment. Hasan said EIC’s CarteNav mission software, already in use by the Australian government, provides a distinct competitive edge by enabling seamless integration with ground systems.

While Paradigm does not yet model the financial impact, Hasan said a win would be “transformative” for aerospace, which represented about 11% of 2024 revenue and $60-million in Adjusted EBITDA. Aerospace peers trade around 12 times forward EV/EBITDA, compared with EIC’s 7.3 times, suggesting potential for revaluation.

“We look forward to the Australian government’s decision in the next few weeks and believe a potential win would be transformative for the Aerospace business,” Hasan said.

EIC recently upsized its credit facility to $3-billion, extending terms to 2029, and has about $1-billion in liquidity to fund growth without resorting to an equity raise. Net debt to Adjusted EBITDA stood at 2.7 times at the end of Q2/25. Paradigm applies a 7.5 times EV/EBITDA multiple on its 2026 forecast to support its $82 target.

Hasan forecasts adjusted EBITDA of $735.5-million on $3.1-billion in revenue for 2025, rising to $851.7-million on $3.6-billion in revenue in 2026.

He added that while a failed bid may distract investors from aerospace’s potential, EIC is unlikely to be severely punished, given ongoing opportunities for smaller surveillance contracts amid rising global demand for ISR services.

-30-