Transcontinental Profit Rises 38.5% in Q2; Shares Pop Almost 8%

Shares of Transcontinental (TCL.A) gained almost 8% on Wednesday after the company reported a strong rise in second-quarter profits. The Montreal-based commercial printing, packaging, and specialty media company said it expects to see growth recovery in printing volume in Fiscal 2021.

In the second quarter, Transcontinental experienced a return to growth and a significant increase in profitability in the printing sector, as well as a robust performance in the packaging and media sectors.

Net income attributable to shareholders came in at C$35.6 million (C$0.41 per share) in Q2 2021, up 38.5% from C$25.7 million (C$0.30 per share) in Q2 2020.

On an adjusted basis, net income amounted to C$47.8 million (C$0.55 per share) in the quarter ended April 25, compared to C$43.6 million (C$0.50 per share) in the prior-year quarter.

On the other hand, revenues decreased 0.3% from C$625.1 million in Q2 2020 to C$623.3 million in Q2 2021.

Transcontinental President and CEO François Olivier said, “We continued to generate very good results, with solid performance in our three sectors and a return to growth in our printing sector.”

He added that the company has the momentum and capacity to pursue its growth objectives given its performance and solid financial position. (See Transcontinental stock analysis on TipRanks)

On Tuesday, RBC analyst Drew Mcreynolds kept a Hold rating on TCL.A with a C$26.00 price target. This implies 7.5% upside potential.

Consensus among analysts is that TCL.A is a Moderate Buy based on 2 Buys. The TCL.A average analyst price target of C$25.50 implies 5.4% upside potential to current levels. Shares have jumped approximately 20% year-to-date.

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