Etienne Ricard, an analyst from BMO Capital, maintained the Hold rating on Alimentation Couche-Tard Inc. The associated price target was raised to C$79.00.
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Etienne Ricard has given his Hold rating due to a combination of factors that reflect a balanced risk-reward scenario for Alimentation Couche-Tard Inc. The company’s operational execution has led to margin improvements, driven by initiatives such as meal bundles and loyalty programs, which have helped counteract the sluggish industry revenue growth. Despite these positive developments, the low U.S. merchandise same-store sales trends are expected to persist into the next fiscal quarter, which tempers the overall growth outlook.
Furthermore, while the M&A pipeline is described as very active, providing potential upside, the current 17x earnings valuation suggests that the stock is fairly priced relative to its risk and reward. The regional performance has been mixed, with some areas showing growth while others have seen declines. Additionally, the target price has been slightly increased to $79, reflecting updated earnings and foreign exchange assumptions, but the overall growth forecast remains modest with low-single-digit annual organic EBIT growth anticipated in the coming years.
Based on the recent corporate insider activity of 27 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of ATD in relation to earlier this year.