logo
  Join        Login             Stock Quote

Transat A.T. Upgraded To 'Sector Performer' By CIBC, $7 PT Maintained

 April 20, 2012 10:56 AM


(By Balaseshan S) CIBC World Markets Inc. analyst Kevin Chiang upgraded his rating on shares of Transat A.T. Inc. (TSE:TRZ.B) to "Sector Performer" from "Sector Underperformer" while maintaining $7 price target.

While Chiang recognizes that TRZ faces a number of headwinds (overcapacity in the sun destination markets, increased competition from scheduled carriers, fuel costs), he believes much of this has been priced in.

TRZ's valuation on an EV to forward EBITDA is hovering at all time lows, currently trading at 0.1 times consensus fiscal 2013 EBITDA. We would argue that investors now have a free option that TRZ can successfully execute on its turnaround strategy.

While TRZ's earnings have lagged post-recession, its balance sheet remains strong. Cash per share is currently $5.62 and price to book value is 0.6 times. TRZ has no long-term debt. In terms of TRZ's turnaround strategy, it expects this will contribute $50 million to the margin by 2014.

[Related -Qihoo 360 Technology Co Ltd. (QIHU) Q2 Earnings Preview: A Green Monday]

The analyst lowered his 2012 EBITDA estimate to $11.60 million from $20.90 million and his 2013 estimate to $47.70 million from $49.90 million, to account for higher fuel price assumptions and to match his in-house forecast.

Transat A.T. is an integrated tour operator in North America. It operates mainly in the holiday travel industry and markets its services in the Americas and Europe. Transat's main business involves developing and marketing holiday travel services in package and air-only formats.

TRZ.B is trading up 1.09% at $5.55 on Friday.

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageMBIA Inc. (MBI) : BTI's $12 a Tough Task

MBIA Inc. (NYSE:MBI) is doing well on a day stocks are struggling The guarantee insurance company is the read on...

article imageUrban Outfitters, Inc. (URBN) Q2 Earnings Preview: A Snug Fit

Urban Outfitters, Inc. (NASDAQ:URBN) will hold a webcast to discuss its second quarter of fiscal-year 2015 read on...

article imageEstee Lauder Companies Inc. (EL) Q4 Earnings Preview: Options Player Betting On EL’s EPS Looking Pretty

Estee Lauder Companies Inc. (NYSE:EL) will release fiscal 2014 fourth quarter and full year financial read on...

article imageHerbalife Ltd. (HLF): 3 Reasons To Pay Attention to Recent Insider Buying

Well, well, well… it looks as if boardroom buyers viewed the recent selloff as an opportunity to buy. read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.