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Alimentation Couche-Tard Inc (TSE:ATD)
TSX:ATD
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Alimentation Couche-Tard Inc
(TSX:ATD)
76Outperform
Positive Factors
Growth Opportunities
The company continues to have several growth opportunities, including the fuel rebrand initiative, improving the profitability of the fresh food program, and significant M&A opportunities in Asia and Europe.
Negative Factors
Equity Financing
ATD would likely need to pay a multiple higher than its own valuation, and a significant amount of equity financing may be required.
Interest Rates
Seven's existing debt carries a much lower interest rate than ATD's debt.
Alimentation Couche-Tard Inc (ATD) vs. S&P 500 (SPY)
Market Cap
C$65.98B
Dividend Yield1.03%
Average Volume (3M)1.39M
Price to Earnings (P/E)18.9
Beta (1Y)0.62
Revenue Growth7.57%
EPS Growth-12.56%
CountryCA
Employees128,000
SectorConsumer Cyclical
Sector Strength50
IndustryRetail - Discretionary
Share Statistics
EPS (TTM)3.67
Shares Outstanding948,064,400
10 Day Avg. Volume1,632,363
30 Day Avg. Volume1,385,548
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.63
Price to Cash Flow (P/CF)8.70
P/FCF Ratio12.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$86.50Price Target Upside24.25% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
Alimentation Couche-Tard Inc Business Overview & Revenue Model
Company DescriptionAlimentation Couche-Tard Inc operates a network of convenience stores across North America, Ireland, Scandinavia, Poland, the Baltics, and Russia. The company primarily generates income through the sale of tobacco products, groceries, beverages, fresh food, quick service restaurants, car wash services, other retail products and services, road transportation fuel, stationary energy, marine fuel, and chemicals. In addition, the company operates more stores under the Circle K banner in other countries such as China, Egypt, and Malaysia. Its operation is geographically divided into U.S., Europe, and Canada. Revenue from external customers fall mainly into three categories: merchandise and services, road transportation fuel, and other.
How the Company Makes MoneyAlimentation Couche-Tard Inc. generates revenue through multiple streams, primarily from the sale of fuel and merchandise in its convenience stores. Fuel sales account for a significant portion of its income, as the company operates numerous fuel stations linked to its store locations. Merchandise sales, including snacks, beverages, and other convenience items, contribute substantially to its revenue. The company also benefits from strategic partnerships with various suppliers and brands, enhancing its product offerings and customer reach. Additionally, Couche-Tard's acquisition strategy and expansion into new markets further bolster its revenue growth, enabling it to leverage economies of scale and operational efficiencies.
Alimentation Couche-Tard Inc Financial Statement Overview
Summary
Alimentation Couche-Tard Inc exhibits strong financial performance with robust profitability metrics and solid cash flow generation. The company maintains a balanced capital structure with manageable leverage. However, attention should be paid to the decrease in free cash flow growth, which could impact liquidity if it continues. Overall, the company is well-positioned financially within the Retail - Discretionary industry.Income Statement
The company shows a strong gross profit margin of 17.2% and a solid net profit margin of 3.5% for TTM (Trailing-Twelve-Months). Revenue growth is healthy at 5.3% compared to the previous annual period, and EBITDA margin remains robust at 8.0%. These metrics indicate strong profitability and growth trajectory despite a slight decrease in EBIT margin.85
Very Positive
Balance Sheet
The debt-to-equity ratio is 1.02, which reflects a moderate level of leverage. Return on equity is solid at 18.4%, indicating effective use of equity to generate profits. The equity ratio stands at 37.7%, suggesting a balanced capital structure. The balance sheet is stable but could face risk if debt levels increase.78
Positive
Cash Flow
The operating cash flow to net income ratio is 1.87, demonstrating strong cash generation ability relative to earnings. The free cash flow to net income ratio of 1.03 indicates adequate free cash flow generation. However, free cash flow growth has decreased by 7.3% from the previous annual report, which could highlight potential investment or growth initiatives.82
Very Positive
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 72.90B | 69.26B | 71.86B | 62.81B | 45.76B | 54.13B | Gross Profit |
| 12.55B | 12.10B | 12.05B | 11.00B | 10.12B | 9.73B | EBIT |
| 3.75B | 3.81B | 4.23B | 3.68B | 3.68B | 3.16B | EBITDA |
| 5.84B | 5.73B | 5.82B | 5.27B | 5.05B | 4.55B | Net Income Common Stockholders |
| 2.58B | 2.73B | 3.09B | 2.68B | 2.71B | 2.35B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 2.23B | 1.87B | 929.20M | 2.17B | 3.03B | 3.68B | Total Assets |
| 37.11B | 36.94B | 29.05B | 29.59B | 28.39B | 25.68B | Total Debt |
| 14.18B | 14.47B | 9.47B | 9.44B | 9.60B | 10.38B | Net Debt |
| 12.02B | 13.16B | 8.63B | 7.30B | 6.59B | 6.74B | Total Liabilities |
| 23.01B | 23.64B | 16.48B | 17.15B | 16.21B | 15.61B | Stockholders Equity |
| 13.97B | 13.19B | 12.56B | 12.44B | 12.18B | 10.07B |
| Cash Flow | Free Cash Flow | ||||
| 2.67B | 2.87B | 2.54B | 2.28B | 2.86B | 2.31B | Operating Cash Flow |
| 4.81B | 4.82B | 4.34B | 3.94B | 4.09B | 3.72B | Investing Cash Flow |
| -5.36B | -6.60B | -2.28B | -1.80B | -1.39B | -1.21B | Financing Cash Flow |
| 1.26B | 2.21B | -3.35B | -2.95B | -3.43B | 480.70M |
Alimentation Couche-Tard Inc Technical Analysis
Negative
69.62
Price Trends
74.31
Negative
76.19
Negative
77.09
Negative
Market Momentum
-1.04
Negative
38.55
Neutral
24.44
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ATD, the sentiment is Negative. The current price of 69.62 is below the 20-day moving average (MA) of 71.49, below the 50-day MA of 74.31, and below the 200-day MA of 77.09, indicating a bearish trend. The MACD of -1.04 indicates Negative momentum. The RSI at 38.55 is Neutral, neither overbought nor oversold. The STOCH value of 24.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:ATD.
Alimentation Couche-Tard Inc Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | C$10.23B | 16.46 | 12.33% | 1.80% | 0.31% | -7.47% | |
76 Outperform | C$65.98B | 18.95 | 18.67% | 1.03% | 7.57% | -12.56% | |
73 Outperform | C$3.09B | 31.82 | 6.33% | 3.52% | 0.89% | ― | |
70 Outperform | C$6.11B | 48.94 | 4.00% | 3.98% | -12.79% | -72.79% | |
69 Neutral | C$2.21B | 16.87 | 18.50% | 3.42% | 3.28% | 1.42% | |
59 Neutral | $12.41B | 10.34 | 1.32% | 3.61% | 1.65% | -18.04% |
* Consumer Cyclical Sector Average
Performance Comparison
TSE:ATD
Alimentation Couche-Tard Inc
69.62
-12.16
-14.87%
LBLCF
Loblaw Companies
129.72
19.58
17.78%
TSE:EMP.A
Empire Co Cl A NV
44.45
12.18
37.74%
TSE:MFI
Maple Leaf Foods
24.74
2.56
11.54%
TSE:NWC
North West
46.76
9.56
25.70%
TSE:PKI
Parkland
35.65
-6.86
-16.14%
Alimentation Couche-Tard Inc Earnings Call Summary
Earnings Call Date: Nov 25, 2024 | % Change Since: -10.33% | Next Earnings Date: Mar 18, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mix of positive and negative aspects. While there were significant achievements in terms of loyalty program expansion, European market performance, and strategic acquisitions, challenges such as the impact of hurricanes, decreased merchandise revenues, and softness in U.S. fuel volumes were also noted. The company remains optimistic about its strategic initiatives and market share gains.Highlights
Strong Performance in European Markets
Most categories performed positively in Europe, with same-store sales increasing by 1.8% and healthy fuel margins across the network.
Successful Integration of Acquisitions
Progress with GetGo acquisition expected to close in 2025, and successful integration of TotalEnergies retail assets in Europe.
Expansion of Loyalty Programs
Increased loyalty program enrollments in the U.S. and Europe, with U.S. Inner Circle registrations reaching 8.3 million, up 12% from the previous quarter.
Positive Momentum in Same-Store Sales
Sequential monthly improvement in U.S. same-store merchandise revenue, indicating positive momentum into the third quarter.
Robust Balance Sheet and Share Repurchase
Strong balance sheet liquidity with $2.2 billion in cash, $2.7 billion in available credit, and repurchase of 8.7 million shares for nearly $519 million.
Lowlights
Impact of Hurricanes in the U.S.
Hurricanes Helene and Milton led to a shutdown of hundreds of stores, impacting same-store sales by approximately 40 basis points and fuel volumes by 70 basis points.
Decrease in Merchandise Revenues
Same-store merchandise revenues decreased by 1.6% in the U.S., 1.5% in Europe, and 2.3% in Canada.
Softness in U.S. Fuel Volumes
Same-store road transportation fuel volumes decreased by 2.2% in the U.S., reflecting lower industry demand and hurricane impact.
Hong Kong Market Challenges
Weak results in the Hong Kong market due to a decrease in cigarette units and increased sales taxes.
Decrease in Net Earnings
Adjusted net earnings attributable to shareholders decreased by 9.8% compared to the corresponding quarter last fiscal year.
Company Guidance
During the earnings call for the second quarter of fiscal year 2025, Alimentation Couche-Tard executives provided detailed guidance and performance metrics. They reported net earnings attributable to shareholders of $709 million, or $0.75 per diluted share, and an adjusted net earnings of $705 million, reflecting a 9.8% decrease compared to the previous year. The company saw a 6.6% increase in merchandise and service revenues, driven by acquisitions despite a decline in traffic. Same-store merchandise revenues decreased by 1.6% in the U.S., 1.5% in Europe and other regions, and 2.3% in Canada, although European same-store sales rose by 1.8%. Fuel margins remained healthy, with road transportation fuel volumes decreasing by 2.2% in the U.S. but increasing modestly in Europe and Canada. The company highlighted significant efforts in operational excellence and disciplined cost management, achieving a 2.3% growth in normalized operating expenses. Looking ahead, Alimentation Couche-Tard remains focused on strategic growth through acquisitions and organic expansion, with plans to open over 100 new stores in North America by the fiscal year-end.Alimentation Couche-Tard Inc Corporate Events
Alimentation Couche-Tard’s Earnings Dip Amid Economic Challenges
Nov 25, 2024
Alimentation Couche-Tard Inc. reported a decrease in net earnings to $708.8 million for the second quarter of fiscal 2025, driven by reduced fuel margins and challenging economic conditions affecting consumer spending. Despite a 6.6% increase in total merchandise and service revenues, the company faced lower same-store sales in various regions due to discretionary spending constraints.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.