Loblaw Companies (TSE:L)
TSX:L
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Loblaw Companies
(TSX:L)
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Rating:64Neutral
Price Target:
C$65.00
▲(6.23% Upside)
Action:Reiterated
Date:05/09/26
The score is supported primarily by strong profitability and cash generation, plus a generally positive earnings outlook and shareholder-return plans from the latest call. Offsetting these strengths are meaningfully elevated leverage, weak near-term technical momentum, and a relatively rich valuation (high P/E with a low dividend yield).
Positive Factors
Strong cash generation
Consistent, high free cash flow provides durable internal funding for capex, automation, and share buybacks without relying on external financing. This cash conversion supports strategic investments and shareholder returns while cushioning the business through cyclical retail pressures.
Negative Factors
Elevated leverage
Meaningful leverage reduces financial flexibility in a defensive but low-margin business. Operating cash flow covers less than half of total debt, leaving less cushion for refinancing stress, limiting optionality for opportunistic M&A or faster store rollout if conditions tighten.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Consistent, high free cash flow provides durable internal funding for capex, automation, and share buybacks without relying on external financing. This cash conversion supports strategic investments and shareholder returns while cushioning the business through cyclical retail pressures.
Read all positive factors
Loblaw Companies (L) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$70.52B
Dividend Yield1.52%
Average Volume (3M)1.32M
Price to Earnings (P/E)31.2
Beta (1Y)0.27
Revenue Growth4.36%
EPS Growth28.73%
CountryCA
Employees220,000
SectorConsumer Defensive
Sector Strength42
IndustryGrocery Stores
Share Statistics
EPS (TTM)4.13
Shares Outstanding1,162,494,600
10 Day Avg. Volume1,517,649
30 Day Avg. Volume1,319,208
Financial Highlights & Ratios
PEG Ratio-0.40
Price to Book (P/B)6.68
Price to Sales (P/S)1.15
P/FCF Ratio17.99
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$70.14Price Target Upside14.63% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)2.59
Revenue Forecast (FY)C$65.58B
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 segmen...
How the Company Makes Money
Loblaw makes money mainly by selling goods and services to consumers through its retail network and related platforms. Its core revenue stream is retail sales from grocery and pharmacy operations, where it earns revenue at the point of sale across...
Loblaw Companies Earnings Call Summary
Earnings Call Date:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jul 23, 2026
Earnings Call Sentiment Positive
The call emphasized consistent, multi-faceted operational progress: steady revenue and EBITDA growth, improving margins, strong e-commerce growth, disciplined capital returns (share buybacks and dividends), successful expansion of discount and health capabilities, automation progress and strategic tech/AI investments. Management acknowledged near-term drags from new store and ramping costs, T&T U.S. investment, category pressures (liquor, tobacco, HABA) and timing uncertainty related to the PC Financial sale and shifted flu season. On balance the company presented multiple clear growth drivers, robust returns, and a plan to continue returning cash to shareholders while managing known short-term headwinds.Positive Updates
Quarterly and Annual Revenue Growth
Q4 (12-week) revenue grew 3.5% to $15.5 billion; full-year consolidated revenue grew 4.4% to $63.7 billion. On a reported basis (including extra week), revenue grew ~11% in the quarter.
Negative Updates
Pressure in Right-Hand Side Categories
Continued weakness in liquor, tobacco and HABA categories exerted ~20 basis points of pressure on food same-store sales during the quarter.
Read all updates
Q4-2025 Updates
Positive
Negative
Quarterly and Annual Revenue Growth
Q4 (12-week) revenue grew 3.5% to $15.5 billion; full-year consolidated revenue grew 4.4% to $63.7 billion. On a reported basis (including extra week), revenue grew ~11% in the quarter.
Read all positive updates
Company Guidance
Loblaw guided that 2026 new‑store investment will be broadly similar to 2025 (roughly ~70 openings versus 77 in 2025), with grocery square footage growth in line with 2025 and drug footprint expected to rise about 3% (with more Shoppers Drug Mart stores); excluding the timing impact of the PC Financial sale and the lapping of the extra 53rd week, management expects the retail business to grow earnings faster than sales and to deliver adjusted EPS growth in the high single digits, plans approximately $2.4 billion of capital expenditures, intends to return most free cash flow to shareholders (targeting roughly $1.9 billion of share buybacks in 2026) and flagged continued same‑store sales momentum into Q1 while noting PC Financial timing and the 53rd week will affect reported results.Loblaw Companies Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
64
Positive
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 64.25B | 63.90B | 61.01B | 59.53B | 56.50B | 53.17B |
| Gross Profit | 19.91B | 19.88B | 19.73B | 19.04B | 17.98B | 16.73B |
| EBITDA | 7.21B | 7.20B | 6.90B | 6.64B | 6.17B | 5.80B |
| Net Income | 2.76B | 2.67B | 2.17B | 2.10B | 1.92B | 1.88B |
Balance Sheet | ||||||
| Total Assets | 41.61B | 41.58B | 40.88B | 38.98B | 38.15B | 36.61B |
| Cash, Cash Equivalents and Short-Term Investments | 960.00M | 1.04B | 2.11B | 1.95B | 1.93B | 2.44B |
| Total Debt | 16.73B | 25.14B | 19.18B | 18.17B | 17.61B | 16.55B |
| Total Liabilities | 30.56B | 30.39B | 29.61B | 27.36B | 26.69B | 24.88B |
| Stockholders Equity | 10.91B | 11.03B | 11.09B | 11.46B | 11.30B | 11.57B |
Cash Flow | ||||||
| Free Cash Flow | 4.43B | 4.10B | 3.60B | 3.58B | 3.18B | 3.65B |
| Operating Cash Flow | 6.26B | 5.81B | 5.80B | 5.65B | 4.75B | 4.83B |
| Investing Cash Flow | -2.02B | -1.89B | -2.02B | -1.84B | -2.37B | -1.27B |
| Financing Cash Flow | -4.23B | -3.99B | -3.82B | -3.93B | -2.75B | -3.25B |
Loblaw Companies Technical Analysis
Negative
61.19
Price Trends
64.14
Negative
63.04
Negative
59.57
Positive
Market Momentum
-0.50
Positive
39.72
Neutral
12.73
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:L, the sentiment is Negative. The current price of 61.19 is below the 20-day moving average (MA) of 63.03, below the 50-day MA of 64.14, and above the 200-day MA of 59.57, indicating a neutral trend. The MACD of -0.50 indicates Positive momentum. The RSI at 39.72 is Neutral, neither overbought nor oversold. The STOCH value of 12.73 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:L.
Loblaw Companies Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | C$18.69B | 20.48 | 14.38% | 1.50% | 3.52% | 5.04% | |
70 Outperform | C$15.98B | 19.22 | 9.50% | 1.89% | 0.74% | ― | |
65 Neutral | C$46.37B | 31.96 | 94.71% | 0.20% | 13.14% | 13.84% | |
64 Neutral | C$70.52B | 31.17 | 24.88% | 1.52% | 4.36% | 28.73% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
57 Neutral | C$35.91B | 80.13 | 21.94% | 1.23% | 4.36% | -0.82% | |
56 Neutral | C$10.57B | -6.61 | 2.98% | 1.78% | 2.35% | -76.67% |
* Consumer Defensive Sector Average
TSE:L
Loblaw Companies
60.66
6.28
11.56%
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Loblaw Companies Corporate Events
Business Operations and StrategyM&A TransactionsRegulatory Filings and Compliance
EQB Wins Competition Bureau Nod for PC Financial Acquisition, Pushing Challenger Bank Strategy Nationwide
Positive
Mar 6, 2026
EQB Inc. and Loblaw Companies Limited said EQB has secured Competition Bureau clearance for its planned acquisition of President’s Choice Bank and related PC Financial entities, a key regulatory step that still requires approvals from the ba...
Business Operations and StrategyFinancial Disclosures
Loblaw Delivers Earnings Growth and Expands Discount, Digital and Healthcare Platforms in 2025
Positive
Feb 25, 2026
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 SGA as a percentage of sales. Higher custom...
Business Operations and StrategyStock BuybackM&A Transactions
Loblaw Sets Automatic Plan to Buy Up to 1.22 Million EQB Shares
Positive
Feb 12, 2026
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 ...
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.