Loblaw Companies (L) AI Stock Analysis

• Market Cap: C$74.11B
• Dividend Yield: 1.52%
• Average Volume (3M): 1.32M
• Price to Earnings (P/E): 28.2
• Beta (1Y): 0.30
• Revenue Growth: 4.21%
• EPS Growth: 14.03%
• Country: CA
• Employees: 220,000
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Grocery Stores
• EPS (TTM): 0.67
• Shares Outstanding: 1,171,893,200
• 10 Day Avg. Volume: 1,517,649
• 30 Day Avg. Volume: 1,319,208
• PEG Ratio: -0.40
• Price to Book (P/B): 6.68
• Price to Sales (P/S): 1.15
• P/FCF Ratio: 17.99
• 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$71.12
• Price Target Upside: 12.47% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): 2.57
• Revenue Forecast (FY): C$65.78B

• Rating: 64 Neutral
• Price Target: C$68.00 ▲(7.53% Upside)
• Action: Downgraded Date: 02/26/26
• Date: Action: Downgraded 02/26/26

The score is driven primarily by improving fundamentals (growth and rising profitability with solid cash generation) but tempered by elevated leverage. Technicals are mixed with near-term weakness versus the 20-day average despite a longer-term uptrend. Valuation is the key headwind (high P/E and modest yield), while the earnings call supports the outlook with low-double-digit adjusted EPS growth guidance despite a few segment-specific headwinds.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term financial stability.

Market Expansion

Expanding store footprint enhances market presence and customer reach, potentially increasing sales and market share over time.

Online Sales Growth

Strong online sales growth reflects successful digital strategy and adaptation to consumer trends, ensuring competitiveness in e-commerce.

Negative Factors

Decline in Free Cash Flow Growth

A decline in free cash flow growth could limit future investment opportunities and impact financial flexibility if the trend persists.

Optical Business Exit Impact

The exit from the optical business incurs immediate costs and may affect sales, indicating potential challenges in strategic realignment.

Segment Challenges

Challenges in specific segments like liquor and tobacco can hinder overall sales growth and require strategic adjustments to mitigate impacts.

Loblaw Companies Business Overview & Revenue Model

Company Description

Loblaw Companies Limited, a food and pharmacy company, engages in the grocery, pharmacy, health and beauty, apparel, general merchandise, financial services, and wireless mobile products and services businesses in Canada. It operates in two segments, Retail and Financial Services. The Retail segment operates corporate and franchise-owned retail food, and associate-owned drug stores. This segment also includes in-store pharmacies, other health and beauty product stores, apparel stores, and other general merchandise stores. The Financial Services segment provides credit card and banking services, the PC Optimum program, insurance brokerage services, and telecommunication services. It also offers PC Health app, a health and wellness app that provides Canadians with access to healthcare resources and support. Loblaw Companies Limited provides its products and services under various brands. The company was founded in 1919 and is headquartered in Brampton, Canada. Loblaw Companies Limited operates as a subsidiary of George Weston Limited.

How the Company Makes Money

Loblaw Companies generates revenue primarily through the sale of groceries and pharmacy products. Its revenue model includes income from retail sales at its supermarkets and drugstores, where it offers a variety of food, health, and beauty items. Additionally, Loblaw earns revenue from its private label brands, which tend to have higher margins compared to national brands. The company also generates income through its loyalty program, PC Optimum, which encourages customer retention and repeat purchases. Significant partnerships with suppliers and manufacturers enable Loblaw to negotiate favorable terms and optimize its product offerings. Furthermore, the company benefits from economies of scale due to its extensive network of stores, which enhances its purchasing power and operational efficiency.

Loblaw Companies Financial Statement Overview

Summary

Revenue and profitability are improving (TTM revenue ~C$63.9B; net margin ~3.9% and operating margin ~7.0%), with steady gross margin (~32%). Cash flow is solid and rising (TTM OCF ~C$6.0B; FCF ~C$4.15B), but conversion is only moderate (~66% of net income). The main financial constraint is elevated leverage (TTM debt-to-equity ~1.75) despite strong ROE (~22%).

Income Statement

TTM (Trailing-Twelve-Months) revenue rose to ~C$63.9B, up from ~C$61.0B in 2024, with profitability continuing to improve (net margin ~3.9% vs ~3.6% in 2024; operating margin ~7.0% vs ~6.5%). Gross margin has been steady around ~32% over the period, pointing to disciplined pricing and mix. The main drawback is that this is still a low-margin business structurally, so earnings remain sensitive to cost inflation and competitive pressure despite the solid upward trajectory in profit.

Balance Sheet

Returns on shareholder capital are strong and improving (TTM return on equity ~22% vs ~20% in 2024), which supports the equity story. However, leverage is meaningfully elevated: TTM debt-to-equity is ~1.75, and total debt increased versus prior years, reducing balance-sheet flexibility. Overall, the balance sheet looks workable for a stable grocery operator, but the higher leverage is a clear constraint and a key risk if operating conditions weaken.

Cash Flow

Cash generation is solid: TTM operating cash flow is ~C$6.0B and free cash flow is ~C$4.15B, with free cash flow up strongly versus 2024. That said, cash conversion versus reported profit is only moderate (TTM free cash flow is ~66% of net income), suggesting working-capital and/or reinvestment demands are meaningful. The company is generating ample cash, but the translation of accounting earnings into free cash flow is not best-in-class.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	63.90B	61.01B	59.53B	56.50B	53.17B
Gross Profit	19.88B	19.73B	19.04B	17.98B	16.73B
EBITDA	7.20B	6.90B	6.64B	6.17B	5.80B
Net Income	2.67B	2.17B	2.10B	1.92B	1.88B
Balance Sheet
Total Assets	41.58B	40.88B	38.98B	38.15B	36.61B
Cash, Cash Equivalents and Short-Term Investments	1.04B	2.11B	1.95B	1.93B	2.44B
Total Debt	25.14B	19.18B	18.17B	17.61B	16.55B
Total Liabilities	30.39B	29.61B	27.36B	26.69B	24.88B
Stockholders Equity	11.03B	11.09B	11.46B	11.30B	11.57B
Cash Flow
Free Cash Flow	4.10B	3.60B	3.58B	3.18B	3.65B
Operating Cash Flow	5.81B	5.80B	5.65B	4.75B	4.83B
Investing Cash Flow	-1.89B	-2.02B	-1.84B	-2.37B	-1.27B
Financing Cash Flow	-3.99B	-3.82B	-3.93B	-2.75B	-3.25B

Loblaw Companies Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 63.24
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:L, the sentiment is Neutral. The current price of 63.24 is below the 20-day moving average (MA) of 66.45, below the 50-day MA of 63.78, and above the 200-day MA of 58.55, indicating a neutral trend. The MACD of 0.10 indicates Positive momentum. The RSI at 42.33 is Neutral, neither overbought nor oversold. The STOCH value of 13.77 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:L.

Loblaw Companies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SAP	70 Outperform	C$17.47B	27.63	-1.32%	1.89%	5.37%	-135.85%
WN	70 Outperform	C$37.60B	25.91	26.36%	1.23%	4.15%	149.50%
EMP.A	68 Neutral	C$11.18B	16.64	12.66%	1.78%	2.58%	7.85%
MRU	66 Neutral	C$20.62B	21.43	14.48%	1.50%	3.71%	12.40%
L	64 Neutral	C$74.11B	28.17	21.51%	1.52%	4.21%	14.03%
DOL	64 Neutral	C$54.75B	42.37	102.01%	0.20%	14.02%	20.11%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%

Loblaw Companies Corporate Events

Loblaw Delivers Earnings Growth and Expands Discount, Digital and Healthcare Platforms in 2025

Loblaw reported strong fourth-quarter 2025 results, with adjusted diluted net earnings per share up 10.9% on a comparable 12-week basis, driven by a 3.5% revenue increase, improved gross margins and flat SG&A as a percentage of sales. Higher customer traffic across its banners, robust e-commerce growth and market share gains underscored the company’s value, quality and convenience proposition for Canadian shoppers.

Performance at Shoppers Drug Mart and Pharmaprix remained solid, with pharmacy, healthcare services, beauty and OTC sales contributing to drug retail same-store growth. For full-year 2025, Loblaw opened 77 new stores, advanced automation with a large distribution centre, expanded its hard discount network and grew margin-accretive businesses in logistics, retail media and healthcare, while preparing to streamline operations via the sale of PC Financial and deepen its loyalty-based financial services partnership with EQ Bank.

Management highlighted continued investment in digital engagement, including omnichannel capabilities and Agentic AI, to support operational efficiency and customer experience. These initiatives, combined with its resilient business model and best-in-class assets, are positioning Loblaw for consistent, sustainable growth and reinforcing its competitive standing in Canada’s food and pharmacy retail markets.

The most recent analyst rating on (TSE:L) stock is a Buy with a C$75.00 price target. To see the full list of analyst forecasts on Loblaw Companies stock, see the TSE:L Stock Forecast page.

Loblaw Sets Automatic Plan to Buy Up to 1.22 Million EQB Shares

Loblaw Companies Limited has entered into an automatic share purchase plan with a broker to facilitate buying common shares of EQB Inc., tied to its previously announced sale of President’s Choice Bank and related entities and the launch of a long-term strategic relationship with EQB. Under the plan, the broker may acquire up to 1,220,000 EQB common shares within preset parameters and in compliance with TSX and Canadian securities rules, with the arrangement ending once that cap is reached or the broader transaction closes.

The plan allows Loblaw to build a meaningful equity position in EQB while insulating trading activity from material non-public information constraints, reinforcing the strategic alignment around financial services following the divestiture of President’s Choice Bank. Outside the plan’s effective period, Loblaw may still purchase EQB shares at its discretion, signaling an ongoing commitment to the partnership and potentially deepening its exposure to the Canadian digital banking and financial services space.

The most recent analyst rating on (TSE:L) stock is a Buy with a C$66.00 price target. To see the full list of analyst forecasts on Loblaw Companies stock, see the TSE:L Stock Forecast page.

Loblaw Completes $500 Million Notes Issuance to Strengthen Financial Position

Loblaw Companies Limited has successfully completed a $500 million issuance of senior unsecured notes, aimed at repaying existing debt and supporting general corporate purposes. The notes, which mature in 2035 and carry a 4.387% interest rate, received favorable credit ratings from Morningstar DBRS and Standard and Poor’s, reflecting confidence in Loblaw’s financial stability and strategic positioning.

The most recent analyst rating on (TSE:L) stock is a Buy with a C$68.00 price target. To see the full list of analyst forecasts on Loblaw Companies stock, see the TSE:L Stock Forecast page.

Loblaw Companies Limited to Issue $500 Million in Senior Unsecured Notes

Loblaw Companies Limited announced the issuance of $500 million in senior unsecured notes, which will mature in 2035 and bear an interest rate of 4.387% per annum. The proceeds from this offering will be used to repay existing debt and for general corporate purposes, enhancing Loblaw’s financial flexibility. The notes are expected to be rated ‘BBB (high)’ with a ‘Positive’ trend by Morningstar DBRS and ‘BBB+’ by Standard and Poor’s, reflecting confidence in Loblaw’s financial stability and market position.

The most recent analyst rating on (TSE:L) stock is a Buy with a C$68.00 price target. To see the full list of analyst forecasts on Loblaw Companies stock, see the TSE:L Stock Forecast page.

EQB Acquires PC Financial, Transforming Canadian Banking Landscape

EQB Inc. has entered into an agreement to acquire PC Financial from Loblaw Companies, marking a significant transformation in the Canadian banking sector. This acquisition will create one of Canada’s largest loyalty-linked banking ecosystems, enhancing the PC Optimum program and expanding EQB’s customer base to over three million Canadians. The transaction, valued at approximately $1.3 billion, will see Loblaw become a significant minority shareholder in EQB, while EQB will gain access to PC Financial’s extensive credit card portfolio and assets. This strategic move is expected to redefine challenger banking in Canada, offering increased value and rewards to customers.

The most recent analyst rating on (TSE:L) stock is a Buy with a C$65.00 price target. To see the full list of analyst forecasts on Loblaw Companies stock, see the TSE:L Stock Forecast page.