Empire Co Cl A NV (EMP.A) AI Stock Analysis

• Market Cap: C$10.23B
• Dividend Yield: 1.8%
• Average Volume (3M): 468.92K
• Price to Earnings (P/E): 16.5
• Beta (1Y): 0.48
• Revenue Growth: 0.31%
• EPS Growth: -7.47%
• Country: CA
• Employees: 128,000
• Sector: Consumer Defensive
• Sector Strength: 79
• Industry: Retailers - Staples
• EPS (TTM): 2.74
• Shares Outstanding: 136,490,860
• 10 Day Avg. Volume: 553,049
• 30 Day Avg. Volume: 468,923
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.33
• Price to Cash Flow (P/CF): 6.70
• P/FCF Ratio: 8.60
• 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$50.00
• Price Target Upside: 12.49% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Empire Co.'s strong financial performance, highlighted by stable revenue growth and solid profitability, combined with positive earnings call sentiment, drive a high overall score. The stock's reasonable valuation and technical indicators suggest potential for continued stability and growth, although investors should monitor the debt levels and market conditions.

Positive Factors

Earnings Growth Potential

There is potential for further narrowing the valuation discount if EMP can demonstrate consistent 8-11% EPS growth.

Store Expansion

Management indicated new store openings will double, reflecting growth with more net new FreshCo sites in Western Canada.

Negative Factors

Market Valuation

EMP continues to trade at a wider-than-historical discount to Loblaw and MRU, despite recent improvements.

Empire Co Cl A NV Business Overview & Revenue Model

Company Description

Empire Company Limited (EMP.A) is a prominent Canadian conglomerate primarily engaged in the food retailing sector through its wholly-owned subsidiary, Sobeys Inc. The company operates a diverse portfolio of grocery stores under various banners, including Sobeys, Safeway, IGA, Foodland, FreshCo, and Thrifty Foods, among others. Empire also has real estate operations through its interest in Crombie REIT, a Canadian real estate investment trust.

How the Company Makes Money

Empire Company Limited generates revenue primarily through its food retail operations, which involve the sale of groceries, food products, and related consumer goods across its various supermarket brands. The company also earns income from its real estate investments, particularly through rental income and property management services associated with its holdings in Crombie REIT. Empire's revenue streams are bolstered by strategic partnerships and initiatives aimed at enhancing supply chain efficiencies, expanding its private-label product offerings, and leveraging digital platforms for e-commerce growth. These efforts are designed to optimize sales and profitability across its retail network.

Empire Co Cl A NV Financial Statement Overview

Summary

Empire Co. demonstrates stable revenue growth and solid profitability margins. The company shows strong cash flow generation with a robust free cash flow. However, the high debt-to-equity ratio suggests potential risk if interest rates rise, though current debt levels remain manageable.

Income Statement

Empire Co. has demonstrated stable revenue growth over the past years, with a TTM revenue increase of approximately 1.16% compared to the previous year. Gross profit and net profit margins are healthy at 26.56% and 2.16% respectively, indicating efficient cost management. However, the slight decrease in net income over the TTM period suggests room for improvement in profitability. EBIT and EBITDA margins are also solid at 3.99% and 7.60%, respectively.

Balance Sheet

The company's balance sheet shows a stable equity position with a debt-to-equity ratio of 1.39, reflecting moderate leverage. The equity ratio is 32.05%, indicating a solid asset base supported by stockholder equity. Return on equity stands at 12.29%, showcasing decent profitability relative to equity. Despite a strong equity foundation, the relatively high debt level poses a potential risk if interest rates rise.

Cash Flow

Empire Co. has shown strong cash flow generation capabilities, with operating cash flow covering net income by a factor of 3.20. The free cash flow to net income ratio is also robust at 1.95, suggesting efficient conversion of income to cash. Free cash flow growth is steady, supporting the company's capital expenditures and financing activities without compromising liquidity.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
30.82B	30.73B	30.48B	30.16B	28.27B	26.59B
	Gross Profit
8.18B	8.07B	7.79B	7.66B	7.20B	6.63B
	EBIT
1.23B	1.31B	1.23B	1.36B	1.30B	1.11B
	EBITDA
2.34B	2.40B	2.28B	2.35B	2.17B	1.92B
	Net Income Common Stockholders
664.30M	725.20M	686.00M	745.80M	701.50M	583.50M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
367.00M	259.60M	221.30M	812.30M	890.50M	1.01B
	Total Assets
16.74B	16.79B	16.48B	16.59B	15.17B	14.63B
	Total Debt
1.12B	7.36B	7.27B	7.46B	7.13B	6.94B
	Net Debt
753.90M	7.10B	7.05B	6.65B	6.24B	5.93B
	Total Liabilities
11.43B	11.32B	11.15B	11.46B	10.68B	10.62B
	Stockholders Equity
5.16B	5.34B	5.20B	4.99B	4.37B	3.92B
Cash Flow		Free Cash Flow
1.29B	1.28B	847.60M	1.33B	1.20B	1.47B
	Operating Cash Flow
2.13B	2.07B	1.61B	2.11B	1.86B	2.09B
	Investing Cash Flow
-660.10M	-608.50M	-684.70M	-891.40M	-502.30M	-376.30M
	Financing Cash Flow
-1.42B	-1.43B	-1.51B	-1.29B	-1.48B	-1.26B

Empire Co Cl A NV Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 44.45
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:EMP.A, the sentiment is Positive. The current price of 44.45 is above the 20-day moving average (MA) of 44.01, above the 50-day MA of 43.44, and above the 200-day MA of 39.51, indicating a bullish trend. The MACD of 0.45 indicates Positive momentum. The RSI at 54.81 is Neutral, neither overbought nor oversold. The STOCH value of 41.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:EMP.A.

Empire Co Cl A NV Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EMP.A	80 Outperform	C$10.23B	16.46	12.33%	1.80%	0.31%	-7.47%
MRU	80 Outperform	C$20.46B	22.30	13.78%	1.44%	1.59%	-1.98%
L	78 Outperform	$56.19B	26.43	19.33%	1.11%	2.49%	7.16%
ATD	76 Outperform	C$65.98B	18.95	18.67%	1.03%	7.57%	-12.56%
NWC	69 Neutral	C$2.21B	16.87	18.50%	3.42%	3.28%	1.42%
Sector *	63 Neutral	$20.77B	13.59	-10.67%	7.41%	1.48%	9.07%
SAP	58 Neutral	C$10.46B	42.30	-2.28%	3.03%	9.20%	-147.37%

Empire Co Cl A NV Corporate Events

Empire Co Reports Strong Q2 Results and Growth Plans

Empire Company Limited reported a solid performance in its fiscal 2025 second quarter, with an earnings per share of $0.73, slightly up from last year’s $0.72. The company saw a 1.8% increase in same-store sales, excluding fuel, and remains focused on enhancing its store network and digital capabilities. Empire aims to boost long-term earnings by investing in renovations, expanding e-commerce, and improving customer personalization.

Empire Co Reports Strong Q2 Results and Growth Plans

Empire Company Limited reported solid financial results for its fiscal 2025 second quarter, with earnings per share of $0.73, marginally higher than last year. The company’s strategic focus on enhancing its store network and digital capabilities continues to drive growth, as evidenced by a 1.8% increase in same-store sales. Empire aims to further boost earnings through customer-centric initiatives and capital investments in store renovations and digital expansion.