Canadian Tire (CTC) AI Stock Analysis

• Market Cap: $10.30B
• Dividend Yield: 3.17%
• Average Volume (3M): 195.00
• Price to Earnings (P/E): 20.6
• Beta (1Y): 0.28
• 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: 3,423,366
• 10 Day Avg. Volume: 304
• 30 Day Avg. Volume: 195
• 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: 1.89
• Enterprise Value/Revenue: 1.19
• Enterprise Value/Gross Profit: 3.61
• Enterprise Value/Ebitda: 9.79
• 1Y Price Target: $192.62
• Price Target Upside: -15.52% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 2
• EPS Forecast (FY): 13.92
• Revenue Forecast (FY): $16.43B

• Rating: 55 Neutral
• Price Target: C$221.00 ▼(-3.07% Downside)
• Action: Reiterated Date: 02/22/26
• Date: Action: Reiterated 02/22/26

Overall score reflects financial risk from higher leverage and notably weaker 2025 cash generation as the biggest constraints. The earnings call was a positive offset with improving margins, EPS growth, and planned capital returns, while technicals remain neutral-to-soft and valuation is only moderately supportive due to a mid-20s P/E alongside a ~3.3% dividend yield.

Positive Factors

Diversified business model

Canadian Tire's mix of flagship stores, banners (Mark's, Sport Chek), petroleum, and financial services spreads revenue across categories and channels. This multi-stream model reduces reliance on any single segment and supports resilience through consumer cycles and seasonality over the next 2–6 months.

Large loyalty program and partnerships

Triangle Rewards scale (7M+ members) and new partnerships broaden rewards reach and increase customer engagement. Large loyalty penetration enables targeted promotions, higher repeat purchase rates, and better data-driven assortment and cross-sell decisions, supporting durable revenue and margin lift.

AI & analytics driving margins

Investments in AI (DAVID pricing) and the MOSaiC Microsoft partnership deepen demand forecasting and dynamic pricing capabilities. Improved pricing and inventory coordination bolster gross margins and reduce markdowns, creating a structural margin tailwind as analytics scale across banners and channels.

Negative Factors

Rising leverage

Higher leverage reduces financial flexibility and increases interest and refinancing risk if consumer spending softens. With debt rising materially in 2025 and equity down, the company has less cushion to absorb shocks or invest opportunistically without prioritizing deleveraging or raising costly capital.

Weakened cash generation

Sharp drop in operating and free cash flow in 2025 limits capacity for buybacks, dividends, and debt repayment. Lower cash conversion increases reliance on external funding for capital allocation and raises vulnerability to margin pressure or inventory build, making cash-driven initiatives less sustainable.

Stagnant revenue and volatile margins

Persistent flat or declining revenue and uneven net margins indicate structural demand and competitive pressures in mature retail categories. Volatile bottom-line performance complicates forecasting and constrains durable earnings growth absent sustained top-line improvement or continued structural margin enhancements.

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 retail sales from its Canadian Tire stores and other banners, including Mark's and Sport Chek. The company earns significant income from the sale of automotive parts, tools, home improvement products, and seasonal merchandise. Additionally, Canadian Tire Financial Services contributes to revenue through interest income and fees associated with its credit cards and financial products. Partnerships with various brands and suppliers enhance product offerings and promotions, driving sales. Furthermore, Canadian Tire's loyalty program, Canadian Tire Money, encourages customer retention and repeat purchases, ultimately bolstering its revenue.

Canadian Tire Financial Statement Overview

Summary

Mixed fundamentals: income statement is moderate (solid gross margin but volatile net margin and largely flat-to-down revenue trend), while the balance sheet shows rising leverage (debt-to-equity worsening in 2025) and cash flow weakened sharply in 2025 with lower cash conversion.

Income Statement

Revenue has been broadly flat to down since 2022 (2023 and 2024 declines, 2025 roughly flat), despite a strong growth figure shown for 2025. Profitability is solid at the gross level (~32%–34%), but operating and bottom-line performance have been volatile: net margin fell sharply in 2023 (~1.3%) before partially rebounding in 2024 (~5.4%) and easing again in 2025 (~3.5%). Overall, the business shows steady demand and decent core margins, but recent earnings consistency is weaker than earlier years (2020–2022).

Balance Sheet

Leverage is elevated and has worsened recently: debt-to-equity moved from ~1.28x (2024) to ~1.67x (2025), with total debt rising materially in 2025 while equity declined. Returns on equity were strong in 2021–2022, dropped sharply in 2023, improved in 2024, and are not provided for 2025—highlighting uneven profitability against a leveraged capital structure. The balance sheet is workable, but higher debt levels reduce flexibility if retail conditions soften.

Cash Flow

Cash generation weakened significantly in 2025: operating cash flow dropped to ~0.95B (from ~2.06B in 2024) and free cash flow fell to ~0.37B (down ~31% year over year). Free cash flow covered only ~39% of net income in 2025 (vs ~72% in 2024), suggesting lower cash conversion. While free cash flow was strong in 2020–2021 and improved in 2023–2024, the 2025 step-down and the prior negative free cash flow in 2022 point to a more variable cash profile.

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: 228.00
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CTC, the sentiment is Positive. The current price of 228 is above the 20-day moving average (MA) of 214.72, above the 50-day MA of 216.55, and below the 200-day MA of 239.30, indicating a neutral trend. The MACD of 0.65 indicates Negative momentum. The RSI at 63.81 is Neutral, neither overbought nor oversold. The STOCH value of 93.83 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CTC.

Canadian Tire Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LNF	67 Neutral	C$1.91B	12.41	15.07%	3.11%	1.99%	31.36%
GBT	66 Neutral	C$429.71M	14.97	5.60%	2.80%	7.20%	-33.22%
PET	65 Neutral	C$1.95B	20.47	106.59%	1.72%	5.09%	14.05%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
CTC	55 Neutral	$10.30B	20.64	13.16%	3.17%	-0.13%	13.73%