A & W Food Services of Canada Inc. (TSE:AW)
TSX:AW
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A & W Food Services of Canada Inc.
(TSX:AW)
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Rating:62Neutral
Price Target:
C$38.00
▲(2.01% Upside)
Action:ReiteratedDate:03/07/26
The score is driven primarily by solid profitability and free-cash-flow generation, balanced against meaningful balance-sheet leverage and recent revenue declines. Valuation is supportive due to the ~5.29% dividend yield and mid-teens P/E, while technicals are mixed-to-soft with the stock trading below key moving averages.
Positive Factors
Free cash flow generation
FCF near net income (C$55.9M, ~98% of net income) shows durable cash generation capacity. Strong FCF supports dividends, franchise support and debt servicing, giving management flexibility to invest in operations or restructure capital without relying solely on external financing.
Negative Factors
High financial leverage
Debt-to-equity near 4.1x and C$906M of debt materially elevate refinancing and interest-rate risk. High leverage constrains strategic flexibility, raises fixed costs, and makes earnings/cash flow more sensitive to shocks, limiting the company's ability to invest organically or through M&A.
Read all positive and negative factors
Positive Factors
Negative Factors
Free cash flow generation
FCF near net income (C$55.9M, ~98% of net income) shows durable cash generation capacity. Strong FCF supports dividends, franchise support and debt servicing, giving management flexibility to invest in operations or restructure capital without relying solely on external financing.
Read all positive factors
A & W Food Services of Canada Inc. (AW) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$894.26M
Dividend Yield5.07%
Average Volume (3M)7.66K
Price to Earnings (P/E)16.4
Beta (1Y)0.43
Revenue Growth-2.54%
EPS Growth-10.57%
CountryCA
EmployeesN/A
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)0.71
Shares Outstanding24,007,011
10 Day Avg. Volume7,901
30 Day Avg. Volume7,657
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)4.09
Price to Sales (P/S)3.08
P/FCF Ratio16.21
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$40.00Price Target Upside7.38% Upside
Rating ConsensusHold
Number of Analyst Covering2
EPS Forecast (FY)2.42
Revenue Forecast (FY)C$299.20M
A & W Food Services of Canada Inc. Business Overview & Revenue Model
Company Description
A & W Food Services of Canada Inc., together with its subsidiaries, develops, operates, and franchises quick service restaurants in Canada. The company offers burgers, chicken products, fries, onion rings, breakfast items, and kid's packs, as well...
How the Company Makes Money
A & W Food Services of Canada Inc. generates revenue primarily through its franchise model, where franchisees pay initial franchise fees and ongoing royalties based on their sales. The company also earns revenue from its company-operated restauran...
A & W Food Services of Canada Inc. Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
38
Negative
Cash Flow
66
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 294.10M | 292.30M | 299.31M | 299.36M | 244.98M |
| Gross Profit | 143.56M | 248.26M | 244.45M | 131.52M | 69.51M |
| EBITDA | 100.54M | 72.42M | 76.26M | 62.58M | 33.34M |
| Net Income | 55.20M | 11.88M | 24.11M | 35.20M | 35.54M |
Balance Sheet | |||||
| Total Assets | 1.24B | 1.21B | 924.59M | 886.91M | 857.82M |
| Cash, Cash Equivalents and Short-Term Investments | 982.00K | 22.53M | 3.85M | 5.04M | 9.63M |
| Total Debt | 905.92M | 915.36M | 659.13M | 631.04M | 630.62M |
| Total Liabilities | 1.02B | 1.04B | 1.05B | 1.02B | 1.00B |
| Stockholders Equity | 221.81M | 163.68M | -211.93M | -216.58M | -146.81M |
Cash Flow | |||||
| Free Cash Flow | 55.90M | 58.32M | 12.95M | 14.20M | 22.19M |
| Operating Cash Flow | 56.97M | 61.23M | 18.95M | 15.88M | 24.68M |
| Investing Cash Flow | -2.48M | -168.38M | 5.13M | -4.63M | 7.21M |
| Financing Cash Flow | -76.04M | 125.83M | -25.26M | -15.88M | -61.83M |
A & W Food Services of Canada Inc. Technical Analysis
Positive
37.25
Price Trends
36.27
Positive
36.52
Positive
36.59
Positive
Market Momentum
0.16
Negative
58.23
Neutral
95.54
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:AW, the sentiment is Positive. The current price of 37.25 is above the 20-day moving average (MA) of 36.30, above the 50-day MA of 36.27, and above the 200-day MA of 36.59, indicating a bullish trend. The MACD of 0.16 indicates Negative momentum. The RSI at 58.23 is Neutral, neither overbought nor oversold. The STOCH value of 95.54 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:AW.
A & W Food Services of Canada Inc. Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | C$510.31M | 16.62 | 10.35% | 5.98% | 1.35% | -1.11% | |
67 Neutral | C$890.13M | 7.28 | 3.64% | 3.51% | 1.38% | -64.10% | |
62 Neutral | C$894.26M | 16.42 | 27.32% | 5.07% | -2.54% | -10.57% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
| ― | C$50.34B | 50.42 | 25.66% | 3.58% | 19.92% | -18.34% |
* Consumer Cyclical Sector Average
TSE:AW
A & W Food Services of Canada Inc.
37.25
8.77
30.80%
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25.74%
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2.07
5.62%
TSE:MCDS
McDonald's Corporation Shs -CAD hedged- Canadian Depositary Receipt Repr Shs Reg S
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-3.20%
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25.05
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7.79%
A & W Food Services of Canada Inc. Corporate Events
Business Operations and StrategyDividendsFinancial Disclosures
A&W Food Services Delivers Higher 2025 Profit, Expands Network Amid Tough Market
Positive
Mar 5, 2026
AW Food Services of Canada Inc. reported that fiscal 2025 system sales rose 2.8% to $1.92 billion, with revenue up 1% and income before income taxes jumping 53% to $76.7 million, supported by positive same-store sales growth in all four quarters. ...
Financial Disclosures
A&W Food Services Sets March 5 Date for Fiscal 2025 Results and Investor Call
Neutral
Feb 11, 2026
AW Food Services of Canada Inc. plans to release its financial results for the fourth quarter and fiscal year ended December 28, 2025 before markets open on March 5, 2026. The timing signals the company’s regular disclosure cycle and sets ex...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.