Canadian Tire Invests to Improve Omnichannel Customer Experience

Canadian Tire (TSE: CTC.A) announced Thursday it will invest C$3.4 billion over four years to offer an improved omnichannel customer experience. At the same time, the retailer announced new long-term financial aspirations.

Driving Long-Term Growth

Canadian Tire plans to achieve the following goals by 2025: growth in consolidated comparable sales (excluding Petroleum) of more than 4%, averaged annually; retail return on invested capital (ROIC) of at least 15% compared to the ROIC of 13.6% recorded in 2021; and diluted EPS of at least C$26, more than double the diluted EPS of C$12.58 recorded in 2019 (diluted EPS of $18.38 and normalized diluted EPS of $18.91 in 2021).

CEO Commentary

Canadian Tire president and CEO Greg Hicks said, “Over the past two years, we have further strengthened our highly competitive, powerful market positioning and unrivalled understanding of the Canadian consumer. We are making strategic investments that will create better customer experiences, deeper customer connections, and drive long-term growth and value for our shareholders. Additionally, our investments in the communities we serve will create jobs and help drive local economies. Through our strategy, we will continue to evolve from a collection of banners, brands and channels into one integrated Company – one in which all our assets render each other more valuable to create a truly differentiated customer experience.”

The company’s focus on investing in the business will be combined with its balanced approach to dividends and share buybacks, which positions it well to continue to generate attractive returns for shareholders over the long term.

Wall Street’s Take

On February 18, BMO Capital analyst Peter Sklar kept a Hold rating on CTC.A, with a price target of C$206. This implies 15.4% upside potential.

Overall, CTC.A scores a Strong Buy consensus rating among analysts based on six Buys and two Holds. The average Canadian Tire price target of C$239.62 implies 34.3% upside potential to current levels.

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