Loblaw Companies (L) AI Stock Analysis

• Market Cap: $68.80B
• Dividend Yield: 1.61%
• Average Volume (3M): 1.39M
• Price to Earnings (P/E): 28.4
• Beta (1Y): 0.42
• Revenue Growth: 3.26%
• EPS Growth: 22.10%
• Country: CA
• Employees: 220,000
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Grocery Stores
• EPS (TTM): 0.60
• Shares Outstanding: 1,187,155,800
• 10 Day Avg. Volume: 1,293,270
• 30 Day Avg. Volume: 1,385,061
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.23
• Enterprise Value/Revenue: 1.36
• Enterprise Value/Gross Profit: 4.21
• Enterprise Value/Ebitda: 11.68
• 1Y Price Target: $64.32
• Price Target Upside: 12.34% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 75 Outperform
• Price Target: C$62.00 ▲(8.30% Upside)

Loblaw Companies' strong financial performance and positive earnings call are the primary drivers of the stock score. The company's consistent revenue growth, profitability, and strategic initiatives provide a solid foundation for future growth. However, technical indicators suggest caution, and the high P/E ratio indicates potential overvaluation. Despite these concerns, the overall outlook remains positive due to effective management and market share gains.

Positive Factors

Revenue Growth

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

AI Integration in Supply Chain

AI integration enhances operational efficiency and cost management, providing a competitive edge and supporting sustainable growth.

Store Expansion

Strategic store expansion increases market presence and customer base, driving future revenue growth and strengthening competitive position.

Negative Factors

Rising Debt Levels

Increasing debt levels could strain financial flexibility and cash flow, posing risks to long-term financial health if not managed effectively.

Cost Increase Requests

Persistent cost pressures from suppliers may impact margins and profitability, challenging Loblaw's ability to maintain cost efficiency.

Tariff Impact

Tariffs negatively affect sales volumes, potentially reducing revenue and profitability, and creating uncertainty in pricing strategies.

Loblaw Companies Business Overview & Revenue Model

Company Description

Loblaw Companies Limited is one of Canada's largest food retailers, operating a diverse portfolio of grocery and pharmacy businesses. The company manages various banners, including Loblaws, No Frills, Real Canadian Superstore, and Shoppers Drug Mart, among others. Loblaw focuses on providing a wide range of products, including fresh food, groceries, health and beauty items, and household goods. The company also emphasizes private label products under the President's Choice brand, catering to various consumer needs across multiple segments.

How the Company Makes Money

Loblaw generates revenue primarily through the sale of food and pharmacy products across its extensive network of retail locations. The company operates a multi-channel revenue model, including brick-and-mortar stores and e-commerce platforms, which allows it to capture a broad customer base. Key revenue streams include the sale of grocery items, pharmacy prescriptions, and health and beauty products. Additionally, Loblaw benefits from its private label offerings, which typically have higher margins compared to national brands. The company also earns revenue from loyalty programs, such as PC Optimum, which drives customer engagement and repeat purchases. Strategic partnerships with suppliers and manufacturers further enhance its product offerings and pricing competitiveness, contributing to overall earnings.

Loblaw Companies Financial Statement Overview

Summary

Loblaw Companies demonstrates strong financial performance with consistent revenue growth, solid profitability, and efficient cash flow generation. The company maintains healthy margins and returns on equity, though moderate leverage requires careful management.

Income Statement

Loblaw Companies has demonstrated consistent revenue growth, with a TTM revenue growth rate of 1.18%. The company maintains strong profitability with a gross profit margin of 32.29% and a net profit margin of 3.96%. EBIT and EBITDA margins are also healthy at 6.97% and 11.63%, respectively, indicating efficient operations. The steady improvement in margins over the years reflects effective cost management and operational efficiency.

Balance Sheet

The company's debt-to-equity ratio stands at 1.77, indicating a moderate level of leverage. Return on equity is robust at 22.23%, showcasing effective utilization of shareholder funds to generate profits. The equity ratio is stable, reflecting a balanced capital structure. However, the increasing debt levels over the years could pose potential risks if not managed carefully.

Cash Flow

Loblaw Companies exhibits strong cash flow generation with a TTM free cash flow growth rate of 3.82%. The operating cash flow to net income ratio of 0.54 and free cash flow to net income ratio of 0.66 indicate solid cash conversion efficiency. The consistent growth in free cash flow over the years highlights the company's ability to generate cash to support operations and growth initiatives.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	62.29B	61.01B	59.53B	56.50B	53.17B	52.71B
Gross Profit	20.11B	19.73B	19.04B	17.98B	16.73B	15.99B
EBITDA	7.25B	6.90B	6.64B	6.17B	5.79B	4.96B
Net Income	2.47B	2.17B	2.10B	1.92B	1.88B	1.11B
Balance Sheet
Total Assets	40.45B	40.88B	38.98B	38.15B	36.61B	35.87B
Cash, Cash Equivalents and Short-Term Investments	1.90B	2.11B	1.95B	1.93B	2.44B	1.94B
Total Debt	19.52B	19.18B	18.17B	17.61B	16.55B	16.61B
Total Liabilities	29.25B	29.61B	27.36B	26.69B	24.88B	24.75B
Stockholders Equity	11.03B	11.09B	11.46B	11.30B	11.57B	10.99B
Cash Flow
Free Cash Flow	3.89B	3.60B	3.58B	3.18B	3.65B	4.03B
Operating Cash Flow	5.86B	5.80B	5.65B	4.75B	4.83B	5.19B
Investing Cash Flow	-2.04B	-2.02B	-1.84B	-2.37B	-1.27B	-1.38B
Financing Cash Flow	-4.15B	-3.82B	-3.93B	-2.75B	-3.25B	-3.28B

Loblaw Companies Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 57.25
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:L, the sentiment is Positive. The current price of 57.25 is above the 20-day moving average (MA) of 56.34, above the 50-day MA of 56.03, and above the 200-day MA of 52.68, indicating a bullish trend. The MACD of 0.83 indicates Negative momentum. The RSI at 54.43 is Neutral, neither overbought nor oversold. The STOCH value of 45.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:L.

Loblaw Companies Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MRU	―	C$20.32B	20.44	14.60%	1.56%	2.26%	12.56%
L	―	$68.80B	28.42	21.77%	1.61%	3.26%	22.10%
EMP.A	―	C$11.14B	16.16	12.97%	1.73%	1.96%	9.26%
WN	―	C$34.21B	34.05	17.72%	1.30%	3.21%	-12.20%
SAP	―	C$13.96B	42.30	-2.20%	2.24%	7.58%	-155.93%
Sector *	―	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
NWC	―	C$2.21B	16.09	18.55%	3.49%	3.04%	4.17%

Loblaw Companies Corporate Events

Loblaw Completes Four-For-One Stock Split

Loblaw Companies Limited has completed a four-for-one stock split of its common shares, effective as of August 19, 2025. This move, executed through a stock dividend, is expected to enhance the liquidity of Loblaw’s shares and potentially broaden its investor base, reflecting the company’s strategic efforts to strengthen its market position.

The most recent analyst rating on (TSE:L) stock is a Buy with a C$261.00 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 Q2 Revenue Growth

Loblaw Companies Limited, a prominent Canadian retailer, operates in the food and drug retail sectors, offering a wide range of products and services across its extensive network of stores and digital platforms.

Loblaw Companies’ Earnings Call: Growth Amid Challenges

Loblaw Companies’ recent earnings call painted a largely positive picture, highlighting robust revenue and earnings growth alongside successful store expansions and technological advancements. Despite facing challenges such as supplier cost increases and inflationary pressures, the overall sentiment was optimistic, with significant achievements overshadowing these hurdles.

Loblaw Announces Four-for-One Stock Split to Enhance Accessibility

Loblaw Companies Limited announced a four-for-one stock split of its common shares, effective August 18, 2025, to enhance accessibility for retail investors and employees, and improve share liquidity. This strategic move is designed to maintain shareholder equity without incurring Canadian income tax liabilities, reflecting Loblaw’s commitment to its stakeholders and market positioning.

The most recent analyst rating on (TSE:L) stock is a Buy with a C$189.00 price target. To see the full list of analyst forecasts on Loblaw Companies stock, see the TSE:L Stock Forecast page.

Loblaw Reports Strong Q2 Revenue Growth and Announces Stock Split

Loblaw Companies reported a 5.2% revenue growth in the second quarter of 2025, driven by increased customer traffic, larger basket sizes, and higher unit sales. The company saw strong performance in both its food and drug retail segments, with notable growth in pharmacy and healthcare services. Loblaw’s expansion strategy includes opening new stores and pharmacy clinics across Canada, enhancing its market presence. Additionally, the company announced a 4-for-1 stock split to maintain share accessibility for retail investors and employees, reflecting confidence in its growth trajectory.

The most recent analyst rating on (TSE:L) stock is a Buy with a C$189.00 price target. To see the full list of analyst forecasts on Loblaw Companies stock, see the TSE:L Stock Forecast page.