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Canadian Tire (TSE:CTC.A)
TSX:CTC.A
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Canadian Tire
(TSX:CTC.A)
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Rating:69Neutral
Price Target:
C$182.00
▲(3.46% Upside)
Canadian Tire's overall stock score reflects a balanced view of its financial performance, technical indicators, valuation, and recent earnings call. The strong earnings call performance and attractive valuation are significant positives, but concerns about declining revenue, high leverage, and cash flow constraints weigh on the score. Technical analysis suggests limited momentum, adding to the cautious outlook.
Positive Factors
Loyalty Program Expansion
Expanding the loyalty program with strong partners enhances customer retention and drives sales, reinforcing Canadian Tire's market position.
AI Pricing Tool Success
The AI tool enhances pricing strategies, improving margin performance and operational efficiency, which supports long-term profitability.
Retail Revenue Growth
Strong retail revenue growth indicates effective sales strategies and market demand, supporting sustained business expansion.
Negative Factors
Declining Revenue
Declining revenue growth poses a risk to future profitability, necessitating strategic adjustments to reverse the trend.
High Leverage
High leverage can strain financial flexibility and increase risk, especially if earnings do not improve, impacting long-term stability.
Cash Flow Constraints
Cash flow constraints limit the company's ability to invest in growth opportunities and manage debt, affecting financial health.
Canadian Tire (CTC.A) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$9.48B
Dividend Yield4.1%
Average Volume (3M)289.86K
Price to Earnings (P/E)13.3
Beta (1Y)0.45
Revenue Growth-0.13%
EPS Growth13.73%
CountryCA
Employees13,973
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)3.78
Shares Outstanding49,534,330
10 Day Avg. Volume300,543
30 Day Avg. Volume289,864
Financial Highlights & Ratios
PEG Ratio0.03
Price to Book (P/B)1.37
Price to Sales (P/S)0.51
P/FCF Ratio5.65
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$187.66Price Target Upside6.68% Upside
Rating ConsensusHold
Number of Analyst Covering6
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Canadian Tire Business Overview & Revenue Model
Company DescriptionCanadian Tire Corporation, Limited provides a range of retail goods and services in Canada. It operates in three segments: Retail, CT REIT, and Financial Services. The Retail segment retails automotive maintenance products and accessories, parts, tires as well as automotive repair and roadside assistance; kitchen, home organization, decor and essentials, home electronics, pet, and cleaning and consumable products; tools, hardware, paint, electrical, plumbing, home environment, and smart home products; and outdoor recreation, exercise, footwear and apparel, hunting, fishing, camping, and sporting goods. It also retails Christmas trees, lights and decor, Halloween décor and costumes, yard care and maintenance, and snow removal equipment; patio furniture, barbeques, pools, trampolines, outdoor power equipment and tools, plants and gardening supplies; backyard amusement, pool fun, and toys and games; gasoline; sporting goods and active wear; casual and industrial apparel and footwear; and outerwear, base-layer, and workwear. This segment offers its products under the Canadian Tire, Canadian Tire Gas, Mark's, PartSource, Helly Hansen, Party City, and SportChek brand names. This segment also participates in loyalty programs, as well as sells its products online. The CT REIT segment operates as a closed-end real estate investment trust that holds a portfolio of 368 properties comprising Canadian Tire stores, Canadian Tire anchored retail developments, industrial properties, a mixed-use commercial property, and development properties. The Financial Services segment provides financial and other ancillary products and services, including consumer credit cards, in-store financing, insurance products, and retail and broker deposits; and savings accounts and guaranteed investment certificates. Canadian Tire Corporation, Limited was founded in 1922 and is headquartered in Toronto, Canada.
How the Company Makes MoneyCanadian Tire generates revenue through multiple streams, primarily from the sale of consumer goods across its retail outlets. The company's key revenue streams include automotive parts and accessories, home improvement products, sports and recreation equipment, and clothing. The company also benefits from its loyalty program, Canadian Tire Money, which encourages repeat purchases. Additionally, Canadian Tire earns income from its financial services, including credit cards and insurance products. Strategic partnerships with various brands and manufacturers enhance its product offerings, while its extensive real estate portfolio provides further financial stability and potential rental income.
Canadian Tire Earnings Call Summary
Earnings Call Date:Nov 06, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 12, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted strong growth in loyalty engagement, earnings per share, and retail revenue, supported by successful AI implementation and strategic partnerships. However, challenges such as the Canada Post strike and declines in certain retail segments were noted. The sentiment was balanced, reflecting both positive achievements and ongoing challenges.Q3-2025 Updates
Positive Updates
Strong Loyalty Engagement
The company reported an increase in loyalty engagement with over 7 million members shopping their banners, marking a 3% increase.
Earnings Per Share Growth
Diluted earnings per share grew nearly 7%, reflecting strong margin management and operational performance.
Record Revenue Growth in CTR and SportChek
Retail revenue, excluding Petroleum, was up close to 6%, driven by CTR dealer restocking ahead of Q4 and solid sales growth across banners. SportChek had a notable 4.2% increase in comparable sales.
AI Pricing Tool Success
The AI pricing tool, DAVID, is helping analytically engineer promotional programs and optimize regular pricing, contributing significantly to margin performance.
Triangle Rewards Program Expansion
The Triangle Rewards program expanded with notable partnerships, including Petro-Canada and Tim Hortons, driving significant member engagement and incremental sales.
Strong Retail Gross Margin
Excluding Petroleum, retail gross margin dollars were up nearly 8%, and the margin rate improved by 57 basis points year-over-year.
Shareholder Returns and Capital Allocation
The company completed a $400 million share repurchase program and announced plans to repurchase up to $400 million more by the end of 2026, alongside a dividend increase.
Negative Updates
Impact of Canada Post Strike
The Canada Post labor dispute affected flyer distribution, impacting sales towards the end of the quarter.
Decline in Living Division Sales
The Living division experienced a decline due to slower sales of summer climate control products and less flyer distribution.
Financial Services IBT Decline
CTFS IBT declined $26 million year-over-year, primarily reflecting higher SG&A and increased write-offs.
Weaker Sales in Essential Categories
Essential categories experienced weaker sales, contributing to a mixed performance in some retail divisions.
Company Guidance
During the Canadian Tire Corporation's Q3 2025 earnings call, the company reported strong performance, highlighting several key metrics. Retail revenue, excluding Petroleum, increased by close to 6%, with consolidated comparable sales growing by 1.8%. SportChek showed a robust performance with comparable sales up 4.2%, while Mark's saw an increase of 2.5%. Canadian Tire Retail (CTR) reported a 1.2% increase in comparable sales. The loyalty program's penetration improved by 117 basis points to 55.2%, and diluted earnings per share rose nearly 7%. Retail gross margin dollars increased by almost 8%, with the margin rate improving by 57 basis points year-over-year. Financial Services saw receivables grow by 2.3%, though the division experienced a decline in IBT due to higher SG&A expenses. The company also announced plans to repurchase up to $400 million in shares by the end of 2026, alongside a dividend increase to $7.20 per share. These strategic moves are part of the company's True North transformation strategy, focusing on AI-driven initiatives, enhancing digital and in-store experiences, and expanding loyalty partnerships.Canadian Tire Financial Statement Overview
Summary
Canadian Tire shows stable financial performance with consistent revenue and operational efficiency. However, declining net profit margins and high leverage pose risks. Cash flow generation is improving, but volatility in free cash flow growth suggests potential risks.Income Statement
Canadian Tire's income statement shows a stable revenue base with a slight growth in the TTM period. The gross profit margin remains healthy, although it has slightly decreased from previous years. Net profit margin has seen a decline, indicating some pressure on profitability. EBIT and EBITDA margins are stable, reflecting consistent operational efficiency. The revenue growth rate has been modest, suggesting a steady but slow growth trajectory.Balance Sheet
The balance sheet indicates a moderate level of leverage with a debt-to-equity ratio above 1, which is typical for the retail industry but poses some risk. Return on equity has decreased over the years, reflecting reduced profitability on shareholders' equity. The equity ratio is stable, indicating a balanced asset structure, but the high debt levels could be a concern if not managed carefully.Cash Flow
Cash flow analysis reveals a positive trend in free cash flow growth, although it has been volatile in previous years. The operating cash flow to net income ratio is relatively low, suggesting that cash generation from operations is not as strong as net income might suggest. The free cash flow to net income ratio is healthy, indicating that the company is generating sufficient cash relative to its net income.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 16.27B | 16.36B | 16.66B | 17.81B | 16.29B | 14.87B |
| Gross Profit | 5.40B | 5.63B | 5.70B | 5.74B | 5.48B | 4.77B |
| EBITDA | 1.72B | 1.65B | 1.64B | 2.22B | 2.23B | 1.82B |
| Net Income | 729.90M | 887.70M | 213.30M | 1.04B | 1.13B | 751.80M |
Balance Sheet | ||||||
| Total Assets | 21.91B | 22.24B | 21.98B | 22.10B | 21.80B | 20.38B |
| Cash, Cash Equivalents and Short-Term Investments | 472.50M | 575.90M | 488.40M | 490.10M | 2.34B | 1.93B |
| Total Debt | 7.83B | 7.91B | 8.81B | 7.72B | 7.09B | 7.16B |
| Total Liabilities | 15.05B | 15.15B | 15.53B | 15.06B | 15.29B | 14.54B |
| Stockholders Equity | 5.90B | 6.16B | 5.55B | 5.62B | 5.12B | 4.50B |
Cash Flow | ||||||
| Free Cash Flow | 539.10M | 1.49B | 772.80M | -146.00M | 1.11B | 2.14B |
| Operating Cash Flow | 1.03B | 2.06B | 1.35B | 466.50M | 1.74B | 2.44B |
| Investing Cash Flow | 1.06B | -264.10M | -747.80M | -230.40M | -658.00M | -848.00M |
| Financing Cash Flow | -2.10B | -1.64B | -621.00M | -1.66B | -653.40M | -462.70M |
Canadian Tire Technical Analysis
Positive
175.91
Price Trends
170.19
Positive
168.82
Positive
167.20
Positive
Market Momentum
1.78
Negative
60.46
Neutral
46.52
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CTC.A, the sentiment is Positive. The current price of 175.91 is above the 20-day moving average (MA) of 172.76, above the 50-day MA of 170.19, and above the 200-day MA of 167.20, indicating a bullish trend. The MACD of 1.78 indicates Negative momentum. The RSI at 60.46 is Neutral, neither overbought nor oversold. The STOCH value of 46.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CTC.A.
Canadian Tire Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | C$1.97B | 11.23 | 15.07% | 3.11% | 1.99% | 31.36% | |
77 Outperform | C$68.83B | 19.44 | 17.53% | 1.08% | 2.25% | 4.76% | |
72 Outperform | C$661.48M | 117.04 | 9.68% | ― | 32.31% | ― | |
69 Neutral | C$9.48B | 13.30 | 13.16% | 4.10% | -0.13% | 13.73% | |
65 Neutral | C$1.92B | 20.06 | 106.59% | 1.72% | 5.09% | 14.05% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
57 Neutral | C$20.18M | 38.24 | ― | ― | 24.43% | ― |
* Consumer Cyclical Sector Average
TSE:CTC.A
Canadian Tire
175.91
20.55
13.22%
TSE:ATD
Alimentation Couche-Tard Inc
75.21
1.35
1.83%
TSE:LNF
Leon's Furniture
28.47
4.56
19.07%
TSE:ECOM
Emerge Commerce Ltd
0.13
0.07
116.67%
TSE:KITS
Kits Eyecare
20.54
12.94
170.26%
TSE:PET
Pet Valu Holdings Ltd.
28.45
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9.68%
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.