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Canadian Tire Corp Ltd (TSE:CTC)
TSX:CTC
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Canadian Tire
(TSX:CTC)
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Rating:68Neutral
Price Target:
C$269.00
▲(6.32% Upside)
Canadian Tire's overall stock score reflects stable financial performance and positive earnings call sentiment, despite technical analysis indicating bearish trends. The valuation is fair, providing a moderate income stream. The company's strategic initiatives and effective inventory management are strengths, but leverage and profitability margins require monitoring.
Canadian Tire (CTC) vs. iShares MSCI Canada ETF (EWC)
Market Cap
$9.55B
Dividend Yield2.87%
Average Volume (3M)291.00
Price to Earnings (P/E)18.8
Beta (1Y)0.39
Revenue Growth0.05%
EPS Growth99.91%
CountryCA
Employees13,973
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)3.57
Shares Outstanding3,423,366
10 Day Avg. Volume199
30 Day Avg. Volume291
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 Cap2.31
Enterprise Value/Revenue1.35
Enterprise Value/Gross Profit4.04
Enterprise Value/Ebitda13.28
Forecast
1Y Price Target
$175.59Price Target Upside-30.60% Downside
Rating ConsensusHold
Number of Analyst Covering1
Canadian Tire Business Overview & Revenue Model
Company DescriptionCanadian Tire Corporation (CTC) is a Canadian retail company that operates in various sectors, primarily automotive, hardware, sports, leisure, and home products. Founded in 1922, CTC is well-known for its extensive network of retail stores, which include Canadian Tire stores, Mark's, and SportChek. The company also offers a range of services such as automotive repair and maintenance, as well as financial services through Canadian Tire Financial Services, which includes credit cards and loyalty programs.
How the Company Makes MoneyCanadian Tire generates revenue through multiple streams, primarily from the sale of retail products in its stores and online. Its key revenue streams include automotive parts and accessories, home improvement products, outdoor and leisure equipment, and sports apparel. Additionally, CTC earns income through its financial services division, which provides credit products and earns interest. The company benefits from a loyal customer base through its Canadian Tire Money loyalty program, which encourages repeat business. Strategic partnerships with suppliers and brands also contribute to its earnings, allowing CTC to offer exclusive products and promotions that drive sales.
Canadian Tire Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong retail sales growth, loyalty gains, and effective inventory management. However, there were challenges with decreased EPS, gross margin pressure, and increased expenses. The sentiment is mixed but leans towards positive due to sales and market share success.Q2-2025 Updates
Positive Updates
Strong Retail Sales Growth
Comparable sales were up 6.4% at CTR, 3.9% at Sport Chek, and 1% at Mark's, driven by increases in both discretionary and essential products.
Loyalty and Market Share Gains
Loyalty spend increased across all income levels, credit card spend at CTR grew faster than competitors for three consecutive quarters, and the company gained market share.
Successful Inventory Management
Dealer inventory remained flat year-over-year while maintaining strong revenue, indicating effective inventory management.
Expansion of Distribution Capabilities
Opened a new 385,000 square foot distribution center improving efficiency and product throughput.
Positive E-commerce Growth
E-commerce sales were up 8% year-to-date, with CTR up 12%, outpacing overall sales growth.
Negative Updates
Decrease in Normalized EPS
Normalized EPS was down 4% to $3.57, impacted by strategic investments in the True North strategy.
Pressure on Retail Gross Margin
Retail gross margin rate was down 90 basis points to 34.8% due to mix and foreign exchange impacts.
Increased SG&A Expenses
Retail SG&A was up $84 million, driven by IT investments, variable compensation, and inflation.
Lower Financial Services IBT
IBT for Financial Services was down $14 million due to increased infrastructure spending, impacting profitability.
Company Guidance
During the Canadian Tire Corporation's Q2 2025 earnings call, the company reported strong top-line growth with comparable sales increasing by 6.4% at Canadian Tire Retail (CTR), 3.9% at Sport Chek, and 1% at Mark's. This growth was driven by increases across discretionary, essential, seasonal, and nonseasonal products. The company also experienced growth in both loyalty and non-loyalty sales, with improvements in traffic and basket size. Despite these positive trends, normalized EPS was down by 4% to $3.57, as the strong retail performance was offset by investments in the True North strategy. The retail gross margin rate decreased by 90 basis points to 34.8% due to mix and foreign exchange pressures. The company continued to invest, with retail SG&A up $84 million, reflecting strategic investments, increased variable compensation, and inflationary costs. Financial services also saw increased spending, with the SG&A rate rising to 27% due to investments in infrastructure and regulatory initiatives. The company plans to continue these investments through 2026 but expects to see the benefits of these efforts in the long term.Canadian Tire Financial Statement Overview
Summary
Canadian Tire shows stable financial performance with strong ROE and efficient operations. However, challenges such as decreasing revenue growth and higher leverage pose potential risks. The company needs to enhance operational efficiency and strengthen cash flow.Income Statement
Canadian Tire has demonstrated stable revenue generation, with a slight decrease in total revenue in the recent TTM period compared to the previous year. The Gross Profit Margin is healthy at 33.74% for TTM, showing efficient cost management. The Net Profit Margin is moderate at 5.21%, but there has been a decline in both EBIT and EBITDA margins, indicating some pressure on operational efficiency. The revenue growth rate has shown volatility, which could be a concern.75
Positive
Balance Sheet
The company's Debt-to-Equity Ratio is 1.42 for TTM, which indicates a higher leverage but manageable given industry standards. Return on Equity is robust at 14.22%, reflecting strong profitability relative to shareholders' equity. The Equity Ratio stands at 26.32%, suggesting a balanced capital structure but with room for improvement in equity strength.70
Positive
Cash Flow
Operating Cash Flow to Net Income Ratio is 1.90, showing good cash conversion from earnings. However, the Free Cash Flow has decreased compared to the previous year, resulting in a negative Free Cash Flow Growth Rate. The Free Cash Flow to Net Income Ratio is 1.17, indicating a decent level of free cash flow generation relative to net income, but there is potential to improve cash reserves further.68
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 16.36B | 16.36B | 16.66B | 17.81B | 16.29B | 14.87B |
| Gross Profit | 5.46B | 5.63B | 5.70B | 5.74B | 5.48B | 4.77B |
| EBITDA | 1.66B | 1.65B | 1.64B | 2.22B | 2.23B | 1.82B |
| Net Income | 761.40M | 887.70M | 213.30M | 1.04B | 1.13B | 751.80M |
Balance Sheet | ||||||
| Total Assets | 21.47B | 22.24B | 21.98B | 22.10B | 21.80B | 20.38B |
| Cash, Cash Equivalents and Short-Term Investments | 1.19B | 575.90M | 488.40M | 490.10M | 2.34B | 1.93B |
| Total Debt | 7.62B | 7.91B | 8.81B | 7.72B | 7.09B | 7.16B |
| Total Liabilities | 14.70B | 15.15B | 15.53B | 15.06B | 15.29B | 14.54B |
| Stockholders Equity | 5.83B | 6.16B | 5.55B | 5.62B | 5.12B | 4.50B |
Cash Flow | ||||||
| Free Cash Flow | 1.11B | 1.49B | 772.80M | -146.00M | 1.11B | 2.14B |
| Operating Cash Flow | 1.63B | 2.06B | 1.35B | 466.50M | 1.74B | 2.44B |
| Investing Cash Flow | 1.05B | -264.10M | -747.80M | -230.40M | -658.00M | -848.00M |
| Financing Cash Flow | -2.08B | -1.64B | -621.00M | -1.66B | -653.40M | -462.70M |
Canadian Tire Technical Analysis
Neutral
253.00
Price Trends
253.03
Negative
254.70
Negative
238.46
Positive
Market Momentum
-1.04
Positive
49.17
Neutral
23.52
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CTC, the sentiment is Neutral. The current price of 253 is below the 20-day moving average (MA) of 256.08, below the 50-day MA of 253.03, and above the 200-day MA of 238.46, indicating a neutral trend. The MACD of -1.04 indicates Positive momentum. The RSI at 49.17 is Neutral, neither overbought nor oversold. The STOCH value of 23.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:CTC.
Canadian Tire Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| ― | $9.55B | 18.80 | 13.84% | 2.87% | 0.05% | 99.91% | |
| ― | C$1.97B | 12.24 | 14.38% | 2.91% | 0.57% | 8.54% | |
| ― | C$417.84M | 15.25 | 5.36% | 2.75% | 7.61% | 1.71% | |
| ― | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
| ― | C$2.46B | 26.48 | 126.66% | 1.35% | 5.18% | 17.66% |
* Consumer Cyclical Sector Average
TSE:CTC
Canadian Tire
253.00
30.31
13.61%
TSE:GBT
BMTC Group Inc.
13.10
0.80
6.50%
TSE:LNF
Leon's Furniture
28.85
2.85
10.96%
TSE:PET
Pet Valu Holdings Ltd.
34.75
9.68
38.61%
Canadian Tire Corporate Events
Canadian Tire’s Balanced Earnings Call: Growth Amid Challenges
Aug 13, 2025
The recent earnings call for Canadian Tire Corp presented a balanced sentiment, highlighting both positive developments and financial pressures. While the company reported strong top-line growth, loyalty, and market share gains, it also faced challenges such as decreased EPS, financial services profitability issues, and increased SG&A costs. Despite these pressures, the company remains optimistic due to positive consumer trends and strategic initiatives.
Canadian Tire Reports Strong Q2 2025 Results
Aug 8, 2025
Canadian Tire Corporation, Limited is a Canadian retail company offering a wide range of products across various sectors including automotive, sports, and home goods, with a strong focus on customer loyalty through its Triangle Rewards program.
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.