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Research Alert: CFRA Raises Opinion On Shares Of Canadian Tire Corporation To Hold From Sell
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Research Alert: CFRA Raises Opinion On Shares Of Canadian Tire Corporation To Hold From Sell
May 9, 2024 5:51 AM

08:20 AM EDT, 05/09/2024 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We raise our 12-month target by C$15 to C$135, based on a '25 P/E of 9.5x and a justified discount to historic averages. We increase our adjusted EPS estimates to C$12.00 from C$11.80 for '24 and to C$14.25 from C$14.15 for '25. CTC posts Q1 adjusted EPS of C$1.38 vs. C$1.00 (+38%), well ahead of the C$0.72 consensus. The beat was driven by stronger-than-expected margins, as revenue fell 5% to C$3.52B (C$20M short of consensus) on a 1.6% drop in comp store sales (consensus = -2.0%), with CTC pointing to a "challenging consumer demand environment." Gross margin expanded 90 bps to 35.5% (110 ahead of consensus), which CTC attributed to mix and favorable freight rates. CTC's year is off to a better-than-feared start and results exceeded expectations during a quarter, which is typically the company's weakest of the year due to seasonality. We raise our opinion to Hold, as we now view the stock's risk/reward as more balanced and we also think buybacks could help lend support to its share price in the coming months.

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