Air Canada (TSX: AC, AC.TO) beat earnings estimates in the third quarter, but rising fuel costs led the airline to cut its 2026 outlook.
The airline reported adjusted earnings of C$0.75 per diluted share for the quarter ended September 30, 2026, above the C$0.51 estimate. That’s a 47.1% beat. Record revenue and strong travel demand couldn’t offset a C$906-million year-over-year increase in fuel costs. Air Canada lowered its full-year adjusted EBITDA forecast and now expects free cash flow to be around break-even.
Recent earnings trend
Air Canada
AC.TO
AC.TO
Air Canada
WealthAwesomeMarket cap
$5.10B
P/E
18.9x
52W high
$31.45
52W low
$16.45
1W change
-4.36%
Beta
1.63
Analyst Price Targets
Based on analyst covering AC · as of Nov 2, 2026
Wall Street analysts forecast AC stock price to rise 55.9% over the next 12 months.
Consensus
BullishBased on avg. target vs last close (formal rating unavailable for Canadian listings)
Avg. Target
C$31.48
+55.9% Upside
Previously C$32.26 on Oct 30, 2026
Current Price
C$20.19
Last close
Targets are snapshotted when they change. Unchanged figures keep their original date. Not financial advice.
Wealth Awesome Price Forecast
WA ModelStatistical 90-day price range based on AC's historical volatility
30-Day Vol
48.0%
Annualized
90-Day Vol
44.2%
Annualized
Trend (90d)
-50.0%
Annualized drift
90d Mean
C$16.89
Expected price
| Horizon | Expected | 68% Range (1σ) |
|---|---|---|
| 30 trading days | C$19.02 | C$16.12 – C$22.45 |
| 60 trading days | C$17.92 | C$14.18 – C$22.65 |
| 90 trading days | C$16.89 | C$12.68 – C$22.49 |
Methodology: Range is calculated using 30-day realized volatility via geometric Brownian motion (log-normal model). 68% band = ±1σ, 95% band = ±2σ. This is a statistical model, not a prediction. Past volatility does not guarantee future results. Not financial advice.
Analyst coverage: 11 analyst(s) cover this name; upcoming EPS consensus is available.
Beat estimates in 4 of the last 4 comparable quarter(s).
| Fiscal period | Report date | Actual EPS | Estimate | Surprise |
|---|---|---|---|---|
| 2026-12-31 | 2027-02-11 | — | -0.9200 | — |
| 2026-09-30 | 2026-10-29 | 0.7500 | 0.5100 | +47.1% |
| 2026-06-30 | 2026-08-11 | 0.4000 | 0.1500 | +166.7% |
| 2026-03-31 | 2026-05-07 | -0.0500 | -0.4400 | +88.6% |
| 2025-12-31 | 2026-02-12 | 0.6500 | 0.3000 | +116.7% |
| 2025-09-30 | 2025-11-04 | 0.7500 | 0.7900 | -5.1% |
For investors, the results show that strong demand and an earnings beat don’t always lead to stronger cash flow when costs rise sharply.
Investor takeaway: Air Canada cut its 2026 adjusted EBITDA forecast to C$2.4 billion–C$2.7 billion from C$2.9 billion–C$3.2 billion. It now expects free cash flow to be around break-even, plus or minus C$150 million. Record revenue, higher yields and an 89.1% load factor point to strong demand, but fuel costs are weighing on profitability.
Shares closed at C$20.19 on October 30, below their 50-day and 200-day moving averages. Analysts expect next-quarter EPS of C$1.03, and estimates have risen over the past month. Fuel prices and Air Canada’s ability to pass higher costs on to customers remain key risks.
C$0.75 adjusted EPS, against a C$0.51 estimate
Air Canada’s 47.1% earnings beat didn’t stop it from cutting its full-year adjusted EBITDA forecast by C$500 million at both ends of the range. The airline now expects C$2.4 billion–C$2.7 billion in 2026 adjusted EBITDA and free cash flow around break-even, plus or minus C$150 million.
Bull case
Air Canada posted record third-quarter operating revenue of C$6.984 billion, up 21% from a year earlier. Yield rose 11%, the load factor improved by 2.6 percentage points, and cargo revenue grew 33%. Adjusted EBITDA was C$936 million, and the airline ended the quarter with C$8.018 billion in total liquidity.
Strong demand, a broad network and a premium offering could help Air Canada recover more of its higher fuel costs through fares and other measures.
Bear case
Fuel expense rose C$906 million from a year earlier to C$2.118 billion. Operating income fell to C$261 million from C$284 million, and free cash flow was negative C$440 million, compared with positive C$211 million a year earlier.
Air Canada expects fuel prices to rise further in the fourth quarter. Management says the airline plans to offset about 70% of the added fuel expense through pricing and other measures. Regulatory scrutiny of its proposed expanded joint business with United Airlines also creates uncertainty for some cross-border growth plans.
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