Someones mentioned in one of the posts that Jeffries assumed AC will produce $150M FCF from 2024-2026. Q1 2024 produced $1.1B FCF already and Q2 will likely produce additional $1.0B FCF. As per Jeffries, from Q2 '24 to 2026, AC can have negative $850M FCF. Perhaps Jeffries assumed a huge increase in pilots salary for this calculation (pun intended). Some analysts probably always see glass half full.
Even if we use AC projected capex (which is at published aircraft price) and Cash Flow From Operations same as 2023 till 2026, AC will produce $3B FCF for 3 years and that will take leverage ratio to almost 0. This includes nominal/practical cost increase in pilot salary.
I had talked about Capex spend and FCF till 2027 in an earlier post. Click on the link below to read my views on the spend. AC can expect ~$6B FCF from 2024-2026 and prepayments in 2024 will smoothen FCF over 3 years to $2.0B each year. CFO had alluded to prepayments and consistent FCF over next years (including capex years) in his recent calls.
https://stockhouse.com/companies/bullboard?symbol=t.ac&postid=35946378 Capex forecast also depends on OEM’s capacity to produce. It seems like OEMs (esp Boeing) won’t be able to meet delivery dates, and thus pushing out the 2025/26 deliveries to 2027/28. This means the peak 2026 capex spend will be smoothened over the following year(s).
Well, once pilots negotiations are behind us, AC will give updated guidance. AC is a FCF generation machine and at sometime that cash will start making its way towards investors. :)