The e-commerce specialist’s 10-for-1 split last Wednesday failed to stem the stock’s plunge, which has lost more than 80% of its market value since last fall. (Photo: 123RF)
What to do with Alimentation Couche-Tard, Shopify, and Quincaillerie Richelieu titles? Here are some analyst recommendations that prices are likely to move in the near future. Note: The author may have a completely different opinion than the one expressed.
Alimentation Couche-Tard (ATD.TO, $51.58): Canaccord analyst reiterates buy recommendation
Despite a mixed investor reaction to the second-largest convenience store operator in North America’s fiscal 4th quarter 2022 results, Canaccord Genuity analyst Derek Dley reiterated his buy rating and price target of $61. The stock price has lost almost 10% in the last 3 trading sessions.
According to him, a good gasoline margin in the United States and improving momentum in the labor market make for a positive near-term outlook.
Last week, the company said it had adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.134 million, ahead of the analyst’s forecast of $1,026 million.
Adjusted earnings per share came in at $0.55, while analysts had expected $0.47.
Couche-Tard’s margins in the United States continued to be very strong, with gasoline prices hitting 46.1 cents a gallon in Q4, well above Canaccord analyst’s forecast of $0.33 a gallon and Q4 guidance Quarter 2021 was $0.34 per gallon Results are driven by supply chain optimization and market conditions, management said.
In Canada, the gasoline margin was 13.4 cents per liter in the fourth quarter, compared to the forecast of 10 cents. In contrast, in Europe and other regions, supply chain issues caused margins to drop from 11 cents a liter to 7.5 cents a liter.
The company’s balance sheet remains very solid, the analyst notes. The fiscal year ends with a net debt ratio of 1.39, leaving plenty of room for future mergers and acquisitions and an increase in the return of capital to shareholders. Current market volatility could cause valuation multiples to fall, which would open the door to some opportunities, management said.
Shopify (SHOP.TO, $40.60): A grossly undervalued stock according to analysis by ATB Capital Markets