Metro: Maintaining Buy as Cost Discipline and Normalized Growth Offset Near-Term Competitive Headwinds

BMO Capital analyst Etienne Ricard has maintained their bullish stance on MRU stock, giving a Buy rating yesterday.

Etienne Ricard has given his Buy rating due to a combination of factors that support a positive medium-term outlook despite near-term headwinds. He acknowledges that Metro’s recent quarter showed modest food volume declines and stable gross margins under competitive pressure, but highlights that the drag from the frozen distribution centre disruption is now behind the company. Adjusted for one-time items, operating expenses rose only modestly and underlying EBITDA performance exceeded his expectations, indicating solid cost discipline and operational resilience. Ricard also notes that normalized same-store sales growth remains positive even after accounting for calendar effects and the temporary impact on pharmacy sales.

Etienne Ricard’s rating is based on his belief that volume and gross margin should gradually recover through the rest of fiscal 2026 as Metro benefits from easier comparisons in the second half and sustained cost-control initiatives. While he recognizes that new discount banners from competitors will continue to weigh on revenue growth in the short term, he considers this largely reflected in the current valuation after trimming his target price and applying a slightly lower earnings multiple. Importantly, he emphasizes Metro’s long-term record of delivering high-single-digit adjusted EPS growth, which he expects the company can still achieve at the lower end of its 8–10% framework. Taken together, these factors lead him to maintain a constructive stance and support his Buy recommendation on the stock.

In another report released yesterday, TipRanks – PerPlexity also downgraded the stock to a Buy with a C$112.00 price target.