Air Canada shares surged 15% after selling 25% of Aeroplan for $2.5B to a Blackstone-led consortium. ATB Cormark sees 52% upside. David Rosenberg adds European industrials.
Air Canada shares surged nearly 15% earlier this week, leading the S&P/TSX composite index, after the carrier agreed to sell a 25% stake in its Aeroplan loyalty program for $2.5 billion to a consortium led by Blackstone Inc.. The deal, which also includes Caisse de dépôt, PSP Investments and BCI, was called a "positive surprise" by ATB Cormark Capital Markets analyst Chris Murray.
Murray raised his price target on the airline to $45 from $32, the highest on the Street, arguing the sale lets Air Canada accelerate debt reduction and share buybacks. The new target implies roughly 52% upside from Friday's close of $29.64. BMO Capital Markets' Fadi Chamoun maintained an outperform rating and a $37 target, saying the next move depends on management's ability to execute on fleet expansion and deliver on longer-term earnings goals.
Separately, David Rosenberg, president of Rosenberg Research, updated his European investment model, adding industrials to the buy list. European companies have reported solid profit growth, he said in a note, with analysts expecting 10-12% earnings growth for the Stoxx Europe 600 in fiscal 2026. Rosenberg highlighted the resilience of corporate profits amid geopolitical shifts, calling each correction a buying opportunity that has carried indexes to new highs.
The model continues to favor utilities and added electrical equipment and tech-related exposure. On the short side: insurance, software, oil and gas, and personal goods. Rosenberg added the MSCI EUR Info Technology index and the STXE 600 Industrial Goods & Services, among others. European stocks offer diversification from the AI concentration risk in U.S. and Asian markets, he said.
Air Canada's 12-month consensus price target is $33.69 based on 13 analysts, according to Bloomberg data.
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