Loblaw Companies (L) AI Stock Analysis

• Market Cap: $73.04B
• Dividend Yield: 1.52%
• Average Volume (3M): 1.32M
• Price to Earnings (P/E): 29.9
• Beta (1Y): 0.26
• Revenue Growth: 4.21%
• EPS Growth: 14.03%
• Country: CA
• Employees: 220,000
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Grocery Stores
• EPS (TTM): 0.69
• Shares Outstanding: 1,181,172,900
• 10 Day Avg. Volume: 1,517,649
• 30 Day Avg. Volume: 1,319,208
• PEG Ratio: 0.93
• Price to Book (P/B): 1.30
• Price to Sales (P/S): 0.24
• P/FCF Ratio: 4.01
• Enterprise Value/Market Cap: 0.00
• Enterprise Value/Revenue: 0.00
• Enterprise Value/Gross Profit: 0.00
• Enterprise Value/Ebitda: 0.00
• 1Y Price Target: $65.16
• Price Target Upside: 6.75% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: C$70.00 ▲(14.68% Upside)

Loblaw Companies' stock is rated favorably due to strong financial performance and positive earnings call sentiment, indicating robust growth and profitability. Technical indicators support a slightly bullish outlook, although the high P/E ratio suggests potential overvaluation concerns.

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

Loblaw Companies exhibits strong financial health with consistent revenue and profit growth, effective cost management, and solid profitability metrics. The balance sheet reflects a stable leverage position, and cash flow generation is robust despite recent declines in free cash flow growth.

Income Statement

Loblaw Companies has demonstrated consistent revenue growth, with a TTM revenue growth rate of 1.38% and a strong historical trend. The gross profit margin remains robust at approximately 32%, indicating efficient cost management. The net profit margin has improved to 3.96% in the TTM, reflecting enhanced profitability. EBIT and EBITDA margins have also shown positive trends, contributing to a solid income statement performance.

Balance Sheet

The company's balance sheet shows a moderate debt-to-equity ratio of 1.77, indicating a balanced approach to leveraging. Return on equity is strong at 22.23%, showcasing effective use of shareholder funds. However, the equity ratio is not explicitly provided, but the overall leverage and equity utilization appear stable.

Cash Flow

Operating cash flow remains healthy, with a TTM operating cash flow to net income ratio of 0.54, suggesting good cash generation relative to earnings. However, the free cash flow growth rate has declined by 5.92% in the TTM, which could be a concern if the trend continues. The free cash flow to net income ratio is solid at 0.66, indicating efficient cash conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	63.15B	61.01B	59.53B	56.50B	53.17B	52.71B
Gross Profit	20.44B	19.73B	19.04B	17.98B	16.73B	15.99B
EBITDA	7.21B	6.90B	6.64B	6.17B	5.80B	4.96B
Net Income	2.48B	2.17B	2.10B	1.92B	1.88B	1.11B
Balance Sheet
Total Assets	41.56B	40.88B	38.98B	38.15B	36.61B	35.87B
Cash, Cash Equivalents and Short-Term Investments	2.25B	2.11B	1.95B	1.93B	2.44B	1.94B
Total Debt	19.92B	19.18B	18.17B	17.61B	16.55B	16.61B
Total Liabilities	30.01B	29.61B	27.36B	26.69B	24.88B	24.75B
Stockholders Equity	11.38B	11.09B	11.46B	11.30B	11.57B	10.99B
Cash Flow
Free Cash Flow	3.66B	3.60B	3.58B	3.18B	3.65B	4.03B
Operating Cash Flow	5.51B	5.80B	5.65B	4.75B	4.83B	5.19B
Investing Cash Flow	-2.02B	-2.02B	-1.84B	-2.37B	-1.27B	-1.38B
Financing Cash Flow	-3.14B	-3.82B	-3.93B	-2.75B	-3.25B	-3.28B

Loblaw Companies Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 61.04
• 50DMA: Positive
• 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 61.04 is below the 20-day moving average (MA) of 61.55, above the 50-day MA of 60.32, and above the 200-day MA of 56.29, indicating a neutral trend. The MACD of 0.14 indicates Positive momentum. The RSI at 47.76 is Neutral, neither overbought nor oversold. The STOCH value of 6.22 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
MRU	78 Outperform	C$20.98B	21.17	14.48%	1.50%	3.71%	12.40%
L	76 Outperform	$73.04B	29.86	21.51%	1.52%	4.21%	14.03%
WN	70 Outperform	C$36.39B	25.24	26.36%	1.23%	4.15%	149.50%
EMP.A	68 Neutral	C$10.77B	15.96	12.66%	1.78%	2.58%	7.85%
SAP	66 Neutral	C$16.55B	-202.51	-1.32%	1.89%	5.37%	-135.85%
DOL	64 Neutral	$54.58B	42.23	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 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.

Loblaw Companies Reports Strong Q3 Revenue Growth and Strategic Expansion

Loblaw Companies reported a 4.6% revenue growth in the third quarter of 2025, driven by increased customer engagement and new store openings. The company’s focus on value offerings and loyalty rewards contributed to higher sales in both food and drug retail segments. Loblaw’s strategic expansion includes opening 76 new stores and 100 new pharmacy clinics by the end of the year, enhancing its market presence and providing affordable groceries and healthcare to underserved communities across Canada. The company also completed a four-for-one stock split, reflecting its strong financial performance and commitment to future growth.

The most recent analyst rating on (TSE:L) stock is a Buy with a C$67.00 price target. To see the full list of analyst forecasts on Loblaw Companies stock, see the TSE:L Stock Forecast page.