Everyone saw the permanent shift to digital coming. Industry forecasts track exactly how fast that migration is accelerating.

Global advertising spend is expected to expand at a 6.1% pace into 2026, from 6.0% in 2025, even as the composition of that spend continues to shift structurally, according to advertising giant WPP’s "This Year, Next Year" report.

While digital formats capture roughly 70% of global ad spend, traditional print is reeling.

This industry-wide slump is exactly why TC Transcontinental is completely rewriting its playbook by exiting packaging. By fully divesting its Packaging Sector to ProAmpac in March 2026, the company doubled down on retail marketing, printing, and media. Post-sale, revenue is split between Retail Services & Printing at ~91% and the Media Sector at ~9%.

The company’s guidance plans to deploy its newly strengthened balance sheet into automated In-Store Marketing (ISM) solutions and regional acquisitions. But will these efforts pay off? The company seems to be in a bit of a transition phase right now.

Paper-thin

Revenue barely moved, but everything underneath it cracked. Q1 26 Revenue inched up to CAD 263.5m, up 2.3% from CAD 257.7m last year. A CAD 5.8m bump was driven mostly by acquisitions and the favorable exchange rate effect. Management admits lower volumes and price concessions offset part of that revenue.

Operating earnings fell hard; down 56.4% y/y to CAD 8.2m (from CAD 18.8m), wiping out over half the profit on a revenue base that barely grew. Lower volumes and discounts on retail services and printing didn’t help. Higher payout bonuses and an increase in asset impairment charges further dragged profits.

Net profit tells the same story. The company swung from a CAD 4.8m quarterly profit last year to a CAD 0.2m loss in Q1 26, a 104% y/y decline.

Strong return and yield

Therefore, TC Transcontinental’s stock is sitting in the bargain bin at CAD 4.7 after a brutal 77.8% collapse over the last year, far behind its 52-week high of CAD 25.6.

With a CAD 409m (USD 294m) market cap, the real story is the massive valuation disconnect. It is trading at a microscopic FY 27e P/E of 4.5x, miles below its 2-year historical average of 10.8x.

5 out of 7 analysts rate the stock a buy, with the other two on hold, with an average target price at CAD 7.7. This implies 63.6% upside potential, although there’s reason to be skeptical: unless management can pull off a massive U-turn right now, that analyst spread looks more like a value trap.

Pivot perils

Acquisitions are masking a shrinking core. Since the company is moving away from packaging, it is now stuck relying heavily on print and retail marketing, which change constantly with the economy.

In addition, the company is dealing with lower sales volumes, price discounts, and the headaches of merging new companies, all while juggling debt that might get tighter before it gets better.

In a world that is going digital, execution now matters more than ever; the press is running, but making a real profit is getting a lot tougher.