Transat A.T. stock. Buy, Sell or Hold?

TD Cowen analyst Tim James reiterated a “Buy” rating on Transat A.T. (Transat A.T. Stock Quote, Chart, News, Analysts, Financials TSXV:TRZ) in a Feb. 3, 2026 note, while trimming his street-high price target to $5.00 from $5.50, still well above the $3.30 consensus.

As reported by the Globe and Mail, James said a labour dispute with pilots in December should have a minimal impact on Transat’s first quarter of fiscal 2026, with results expected to “begin to demonstrate normalized margins” as several headwinds fade. He pointed to resilient leisure demand, the return of previously grounded aircraft, ratification of a new pilot contract, and continued execution of the company’s Elevation cost and efficiency program.

“We forecast Q1/F26 revenue up 3.6% year over year to $859-million (consensus: $853-million) on 1.4% yield and 1.7% traffic,” James said. He added that improving fleet availability should support capacity growth of about 3.0%.

TD Cowen forecasts Adjusted EBITDA of $33.6-million, implying a 3.9% margin, versus consensus of $20.8-million, reflecting roughly 150 basis points of margin expansion.

James said investor focus on the upcoming earnings call is likely to centre on booking trends and management’s commentary around the path to free-cash-flow positivity in fiscal 2026, which TD Cowen does not expect this year. His valuation is based on a 3.5x multiple, reflecting peer comparisons, the travel demand outlook, competitive pressures, and Transat’s elevated financial risk profile.

The outlook follows a strong fiscal 2025, when Transat delivered record Adjusted EBITDA of $271-million on revenues of $3.4-billion, alongside a sharp improvement in net income and reduced government debt under the LEEFF program. Management has said initiatives under the Elevation Program remain on track to contribute $100-million in Adjusted EBITDA by mid-2026, providing further support for margin normalization as operational conditions stabilize.

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