Canadian Tire (CTC.A) AI Stock Analysis

• Market Cap: C$10.32B
• Dividend Yield: 4.1%
• Average Volume (3M): 289.86K
• Price to Earnings (P/E): 16.3
• Beta (1Y): 0.56
• Revenue Growth: -0.13%
• EPS Growth: 13.73%
• Country: CA
• Employees: 13,973
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 4.47
• Shares Outstanding: 49,399,530
• 10 Day Avg. Volume: 300,543
• 30 Day Avg. Volume: 289,864
• PEG Ratio: -0.49
• Price to Book (P/B): 1.61
• Price to Sales (P/S): 0.58
• P/FCF Ratio: 25.51
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$199.58
• Price Target Upside: 2.54% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): 13.92
• Revenue Forecast (FY): C$16.43B

• Rating: 58 Neutral
• Price Target: C$196.00 ▲(0.70% Upside)
• Action: Reiterated Date: 02/22/26
• Date: Action: Reiterated 02/22/26

The score is held back primarily by leveraged balance-sheet positioning and volatile profitability/cash-flow trends. Offsetting factors include improving recent operating momentum and a positive earnings update with buybacks and a higher dividend, plus supportive technicals—though momentum appears somewhat overbought.

Positive Factors

Large, growing loyalty program

High and rising loyalty penetration builds durable customer retention and recurring purchase behavior. A 7M+ member base deepens data assets for personalization, boosts cross-banner sales and supports stable revenue and higher lifetime value independent of cycle-driven traffic swings.

AI-driven pricing capability (DAVID)

An in-house AI pricing engine that improves promotional efficiency and regular pricing can sustainably lift gross margins and promotional ROI. Over months this reduces margin compression, improves inventory turns, and institutionalizes data-led decision making across banners.

Disciplined capital returns and allocation

Material buybacks plus a dividend hike reflect management focus on shareholder returns and capital allocation discipline. When paired with operational improvements, these actions indicate confidence in free cash generation and provide a durable floor to shareholder returns over the medium term.

Negative Factors

High financial leverage

Sustained debt-to-equity above 1x constrains flexibility in a retail business with cyclical demand. Elevated leverage raises interest and refinancing risk, limits capacity for opportunistic investment, and reduces resilience to margin or sales downturns over the coming months.

Volatile cash generation

Inconsistent operating cash and weak free cash flow conversion reduce the sustainability of dividends, buybacks and reinvestment. Volatility in cash makes funding growth initiatives and deleveraging harder without relying on external financing or cutting returns.

Earnings and margin volatility

Historic swings in margins and earnings indicate exposure to category shifts, promotional pressure and cost volatility. Persistent margin variability increases forecasting risk, undermines predictability of returns and complicates long-term capital allocation decisions.

Canadian Tire Business Overview & Revenue Model

Company Description

Canadian 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 Money

Canadian 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 Financial Statement Overview

Summary

Moderate financial quality. Revenue scale is resilient, but earnings and margins have been volatile with notable margin compression versus 2020–2022. Balance sheet leverage is the main constraint (debt-to-equity above 1x and higher in 2025), and cash generation is uneven with a free-cash-flow decline in 2025 and weaker cash conversion versus 2024.

Income Statement

Revenue has been relatively stable over the cycle, but growth has been uneven (down in 2023–2024, then a sharp rebound in 2025). Profitability has weakened versus earlier years: net margin fell from strong levels in 2020–2022 to very low in 2023 and only partially recovered in 2024–2025, while operating profitability also stepped down from 2021–2022 peaks. Overall, the income profile is solid in scale but shows meaningful earnings volatility and margin compression risk.

Balance Sheet

Leverage is the key constraint: debt-to-equity sits above 1x throughout the period and moved higher in 2025 as total debt increased while equity declined. Equity is meaningful, but the balance sheet is more debt-heavy than ideal for a retailer, reducing flexibility if operating conditions soften. Returns on equity (where provided) were strong in 2021–2022, but dropped sharply in 2023 and have not consistently matched prior highs.

Cash Flow

Cash generation is mixed. Operating cash flow and free cash flow were strong in several years (notably 2020–2021 and 2024), but volatility is high, including negative free cash flow in 2022 and a sizable free cash flow decline in 2025. Cash conversion also weakened recently: in 2025, free cash flow covered well under half of net income, indicating less efficient conversion of earnings into cash versus 2024.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	16.32B	16.36B	16.66B	17.81B	16.29B
Gross Profit	5.39B	5.63B	5.70B	5.74B	5.48B
EBITDA	2.17B	1.65B	1.64B	2.22B	2.23B
Net Income	578.50M	887.70M	213.30M	1.04B	1.13B
Balance Sheet
Total Assets	21.54B	22.24B	21.98B	22.10B	21.80B
Cash, Cash Equivalents and Short-Term Investments	702.00M	575.90M	488.40M	490.10M	2.34B
Total Debt	9.76B	7.91B	8.81B	7.72B	7.09B
Total Liabilities	14.73B	15.15B	15.53B	15.06B	15.29B
Stockholders Equity	5.86B	6.16B	5.55B	5.62B	5.12B
Cash Flow
Free Cash Flow	370.10M	1.49B	772.80M	-146.00M	1.11B
Operating Cash Flow	952.10M	2.06B	1.35B	466.50M	1.74B
Investing Cash Flow	638.80M	-264.10M	-747.80M	-230.40M	-658.00M
Financing Cash Flow	-1.51B	-1.64B	-621.00M	-1.66B	-653.40M

Canadian Tire Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 194.63
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: 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 194.63 is above the 20-day moving average (MA) of 183.82, above the 50-day MA of 176.96, and above the 200-day MA of 171.42, indicating a bullish trend. The MACD of 4.97 indicates Negative momentum. The RSI at 74.32 is Negative, neither overbought nor oversold. The STOCH value of 76.79 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ATD	77 Outperform	C$75.01B	22.62	17.53%	1.08%	2.25%	4.76%
KITS	72 Outperform	C$563.06M	67.36	9.68%	―	32.31%	―
LNF	67 Neutral	C$1.90B	12.20	15.07%	3.11%	1.99%	31.36%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
CTC.A	58 Neutral	C$10.32B	16.32	13.16%	4.10%	-0.13%	13.73%
ECOM	57 Neutral	C$14.95M	106.09	―	―	24.43%	―
PET	57 Neutral	C$1.69B	24.78	106.59%	1.72%	5.09%	14.05%