Here’s what RBC thinks about Air Canada’s stock right now

RBC Dominion Securities analyst James McGarragle reiterated his “Outperform” rating and $25.00 price target on Air Canada (Air Canada Stock Quote, Chart, News, Analysts, Financials TSX:AC) on Nov. 25, saying the carrier’s third-quarter results and updated 2025 outlook were broadly in line with expectations.

As reported by the Globe and Mail, McGarragle said the main debate coming out of the quarter was not the 2025 numbers but the cost outlook for 2026. Management indicated that unit costs will run higher than analysts had been modelling, driven by aircraft delivery delays, new labour agreements, and higher airport infrastructure charges.

“Despite near-term margin challenges, we continue to see a compelling long-term opportunity in AC shares for investors willing to look past what we see as transitory headwinds,” he said.

Air Canada released Q3 results on Nov. 4, reporting $5.774-billion in operating revenue and $284-million in operating income, for a 4.9% margin. Adjusted EBITDA was $961-million, or 16.6%. Net income came in at $264-million, or $0.88 per diluted share; adjusted earnings were $0.75.

Chief executive Michael Rousseau said the company “delivered a solid third quarter financial and operating performance, after adjusting for the labour disruption,” and added that on-time performance and net promoter scores “exceeded both internal targets and last year’s levels.” He said booking trends remain constructive into Q4 and early 2026.

Rousseau highlighted ongoing fleet renewal and a refreshed Rouge offering as key initiatives for the next year, saying Air Canada will work to improve productivity and cost discipline while preparing the airline to “grow and expand margins” as new aircraft arrive. He also emphasized free-cash-flow generation, including a renewed share buyback program.

The carrier slightly tightened its full-year 2025 guidance, now projecting $2.95-billion to $3.05-billion in Adjusted EBITDA, compared with the prior range of $2.9-billion to $3.1-billion.

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