In a report released yesterday, Etienne Ricard from BMO Capital maintained a Hold rating on Empire Co Cl A NV, with a price target of C$51.00.
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Etienne Ricard has given his Hold rating due to a combination of factors influencing Empire Co Cl A NV’s current financial outlook. The company’s recent fiscal Q2 results showed a slight underperformance with earnings per share falling just below expectations. Additionally, the pace of gross margin expansion has moderated, aligning with management’s long-term guidance but indicating a deceleration from previous quarters. This suggests that gross margins may not provide as strong a counterbalance to the anticipated growth in selling, general, and administrative expenses.
Another reason for the Hold rating is the company’s trading position. Empire Co Cl A NV is currently trading at a discount compared to its peers, Loblaw and Metro, and also relative to the S&P/TSX Composite Index. While there is potential for growth, particularly with strategic investments and expansion plans, there remains uncertainty about the company’s ability to consistently achieve the targeted 8-11% annual earnings per share growth. This lack of visibility into meeting new financial targets has contributed to the decision to maintain a Hold rating.
Ricard covers the Financial sector, focusing on stocks such as Sprott, Fiera Capital A, and goeasy. According to TipRanks, Ricard has an average return of 24.0% and a 69.29% success rate on recommended stocks.