Air Canada stock: this analyst just raised his price target

Stifel analyst Daryl Young says Air Canada’s (Air Canada Stock Quote, Chart, News, Analysts, Financials TSX:AC) Q2 results should be solid, but Q3 guidance will be the key driver for the stock.

As reported by the Globe and Mail, in his July 22 preview, Young maintained his “Buy” rating on Air Canada and raised his target to $30.00 from $25.50. The average target is $25.36.

Air Canada is scheduled to report Q2 results Aug. 12.

Young said Q2 EBITDA could be toward the high end of management’s $575-million to $725-million guidance range, supported by resilient demand, quick fare increases and a more than 30% pullback in fuel prices after their mid-May peak.

“We expect constructive Q3/26 guidance, but with some noise/softness around Atlantic leisure bookings/yields,” Young said.

He said some pressure could come from price resistance and uncertainty around potential fuel shortages, while domestic Canada remains competitive because of continued capacity growth.

Still, Young said the broader demand backdrop remains strong. He expects robust bookings through year-end 2026, with premium, corporate, sixth-freedom and cargo demand all performing well.

He also said Air Canada appears to be through most of its union negotiations, which could provide four years of labour stability, though the IAMAW agreement still needs to be ratified.

“However, we acknowledge that fuel/fare dynamics remain highly volatile, making Q3 guidance the key share price driver.”

-30-