Yahoo Autos Air Canada's stock surges 10% as carrier upgrades 2023 outlook on higher demand
Analyst says strong demand trends are allowing the airline to charge higher prices
Air Canada's stock (AC.TO) surged nearly 12 per cent on Friday after the airline upgraded its 2023 outlook, pointing to stronger demand and lower fuel prices.
The Montreal-based airline says it now expects adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in 2023 to be in the range of $3.5 billion to $4 billion, up from its previous forecast of between $2.5 billion and $3 billion.
Shares of Air Canada surged on the Toronto Stock Exchange on Friday, jumping as much as 14 per cent. The stock closed the trading day at $20.46 per share, an increase of nearly 12 per cent compared to Thursday's close.
"AC is capitalizing on very solid near-term demand trends that are allowing the company to raise prices in excess of rising costs, while benefiting from the drop in fuel prices," RBC Capital Markets analyst Walter Spracklin wrote in a note to clients on Friday, increasing the price target for the stock from $20 to $22 per share.
"While we remain concerned regarding the post-summer demand and pricing, we believe management efforts to regain its footing post-COVID are commendable."
