Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (CAD) | Target 1 (CAD) | Target 2 (CAD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 20 Jan, 26 | EIF | Buy | CAD 93.35 | CAD 98.85 | CAD 102.25 | 8 days | Closed |
5.89%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
Exchange Income Corporation, together with its subsidiaries, engages in aerospace and aviation, and manufacturing markets worldwide. The company operates in two segments, Aerospace & Aviation, and Manufacturing. The Aerospace & Aviation segment offers fixed wing and rotary wing; and medevac, passenger, charter, freight services, and auxiliary services; and operates flight schools. This segment also provides mission systems design and integration, aircraft modifications, intelligence, surveillance, reconnaissance operations, software development, logistics, and in-service support; and aftermarket aircraft, engine and parts sales, aircraft and engine leasing, and aircraft management services. The Manufacturing segment turnkey services, such as planning, consultation, delivery and installation, logistical support, and removal and washing solutions; design, manufacture, and installation of the exteriors of residential and mixed-use high rise buildings which integrate residential, retail, and office spaces; and wireless and wireline construction and maintenance services; manufacture services of precision parts and components and portable hydronic climate control equipment, as well as specialized heavy-duty pressure washing and steam systems, commercial water recycling systems, and custom tanks. Exchange Income Corporation is headquartered in Winnipeg, Canada.
Rising Depreciation Burden from Recent Acquisitions: Depreciation on capital assets increased by approximately CAD 20 million year-over-year
Profitability Contraction in the Manufacturing Segment: Adjusted EBITDA declined from CAD 51 million in Q3 FY24 to CAD 45 million in Q3 FY25
Solid Growth in Net Earnings Despite Higher Asset Base: Net earnings advanced from CAD 56 million in Q3 FY24 to CAD 69 million in Q3 FY25
Enhanced Cash Flow Generation Supporting Shareholder Returns: Free cash flow strengthened materially from CAD 136 million in Q3 FY24 to CAD 171 million in Q3 FY25
EIC’s earnings trajectory remains exposed to cyclical infrastructure spending, tariff-driven input cost volatility, and execution risk around large aviation acquisitions despite its diversified business model
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 93.35 | 85.75 | 98.85 | 102.25 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Record Revenue Growth Driven by Aerospace & Aviation Expansion: Exchange Income Corporation delivered its highest-ever quarterly revenue of Q3 FY25: CAD 960 million, reflecting a strong 35% increase from Q3 FY24: CAD 710 million, primarily supported by the consolidation of Canadian North and improved activity across essential air services and aircraft leasing. The Aerospace & Aviation segment alone contributed a 57% year-over-year revenue increase, highlighting the effectiveness of recent acquisitions and organic operational recovery following earlier wildfire disruptions.
EBITDA Strength Reflecting Scaled Operations and Improved Utilization: Adjusted EBITDA reached a record Q3 FY25: CAD 231 million, up 20% from Q3 FY24: CAD 193 million, supported by stronger leasing margins, enhanced medevac contract pricing, and higher utilization levels in aviation operations. While Aerospace & Aviation delivered robust margin expansion, these gains were partially offset by softer performance in the Manufacturing segment due to cost pressures and project delays.
Profitability Expansion Despite Higher Depreciation and Financing Costs: Net earnings rose to Q3 FY25: CAD 69 million compared with Q3 FY24: CAD 56 million, reflecting a 23% increase, as operating momentum outweighed higher depreciation linked to newly acquired aviation assets and increased growth capital investments. The company continued converting operational scale into bottom-line growth while absorbing acquisition-related cost structures.
Strong Cash Generation Supporting Dividend Growth: Free cash flow climbed to Q3 FY25: CAD 171 million, up from Q3 FY24: CAD 136 million, representing a 26% improvement, while free cash flow less maintenance capital expenditures increased to CAD 88 million from CAD 81 million. This enhanced cash profile enabled EIC to announce a 5% dividend increase, reinforcing its shareholder return framework.
Aerospace & Aviation as the Primary Earnings Engine: The Aerospace & Aviation segment delivered Q3 FY25 EBITDA of CAD 202 million, reflecting a 30% increase year-over-year, supported by the addition of Canadian North, stronger aircraft leasing demand, improved load factors, and pricing resets in medevac contracts. Leasing activity remained a high-margin contributor, while large asset sales provided incremental revenue albeit at lower margins.
Manufacturing Segment Pressured by Tariffs and Project Deferrals: Manufacturing revenue edged up modestly to Q3 FY25: CAD 279 million from Q3 FY24: CAD 276 million, but segment EBITDA declined to CAD 45 million from CAD 51 million, impacted by aluminum tariffs, operational inefficiencies tied to delayed construction projects, and softer rental demand in Canadian access matting operations. These pressures outweighed strong U.S. composite mat performance and growth in precision manufacturing volumes.
Strengthened Balance Sheet and Simplified Capital Structure: EIC materially reduced financial complexity through the redemption of convertible debentures, increasing equity while maintaining leverage near historical lows. With approximately CAD 1.2 billion in available liquidity, the corporation remains positioned to fund acquisitions and organic expansion without stressing its capital profile.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Industrials Industry: Airlines
| Company | Change (CAD) | Price (CAD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| EIF Exchange Income Corporation |
-0.21 0.16% | 133.62 | 33.09 | 26.04 | 1.77 | 3.34 | 2.49 | 10.95 |
| AC Air Canada |
-0.7 2.89% | 23.50 | 10.12 | 19.49 | 0.25 | 2.15 | 0.52 | 3.41 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels as on January 20, 2026. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned has been achieved and is subject to the factors discussed above.
Note 4: StockNextt reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
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