Rouge10 - (1/30/2024 9:26:40 AM)
RE:RBC's forecast for AC stock
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Correction: highlighted in yellow color.
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RBC takes the most conservative approach towards AC. Let’s check below RBC EBITDA forecast for 2023 and 2024 as described
Q/Year RBC Est (30-90 days ahead of results) MM Actual MM Diff
2022Q4 $353 $389 $36
2023Q1 $290 $411 $121
2023Q2 $939 $1,220 $281
2023Q3 $1,530 $1,830 $300
2023Q4 $524 ~$750 (est) $226
2023 $3,283 ~$4,2XX (est) $1,0XX
RBC’s EBITDA forecast for year 2023 made in Feb ’23 was $2.8B and first 3Qs EBITDA is already at $3.5B.
Todays’ forecast for 2024 is
2024 $3,209 ~$4,500 (est) $1,291
Keep in mind 2024 capacity could be approx. 10% higher than 2023; most of this will be seen in summer months. Q1 results will beat RBC Q1 24 forecast and Q1 23 actuals. As explained in earlier post the 2024 demand/capacity levels are way below they should be (~115% of 2019) with annual regular increases from 2019 -2024. At 100%, we will still be below, allowing yields/margins to be strong. AC is managing capacity closely in order to maintain margins.
RBC is using EV/EBITDA ratio of 3.5 for forecasting sp but at a lot lower EBITDA. If we use actual 2023 EBITDA (~$4.2B or $4.0 using RBC Q4 ’23 estimates) at ratio of 3.5, sp calculation should be in the range of $30 in coming months and $40 at end of 2024.