Loblaw Companies (L) AI Stock Analysis

• Market Cap: C$72.30B
• Dividend Yield: 1.53%
• Average Volume (3M): 1.32M
• Price to Earnings (P/E): 29.6
• Beta (1Y): 0.29
• 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: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$65.25
• Price Target Upside: 5.90% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 78 Outperform
• Price Target: C$71.00 ▲(15.24% Upside)

Loblaw Companies' strong financial performance and strategic initiatives are the primary drivers of its stock score. Positive earnings call sentiment and recent corporate events further support the score. However, the high valuation and potential technical pullback are risks to consider.

Positive Factors

Revenue Growth

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

Online Sales Expansion

Significant growth in online sales enhances Loblaw's multi-channel strategy, catering to evolving consumer preferences and increasing market reach.

Strategic Partnership

The partnership with Uber Eats expands Loblaw's distribution channels, potentially increasing customer base and sales through enhanced convenience.

Negative Factors

Rising Debt Levels

Moderate leverage requires careful management to avoid financial strain, potentially impacting long-term investment and growth capacity.

Optical Business Exit

The exit from the optical business incurs costs and may temporarily impact sales, reflecting challenges in segment management and strategic adjustments.

Segment Challenges

Challenges in specific segments like liquor and tobacco can hinder overall sales growth, requiring strategic focus to mitigate impacts.

Loblaw Companies Business Overview & Revenue Model

Company Description

Loblaw Companies Limited is one of Canada's largest food retailers, operating a diverse range of grocery stores, pharmacy services, and other retail offerings. The company is known for its flagship supermarket chain, Loblaws, as well as Shoppers Drug Mart, and it serves millions of customers across the country. Loblaw operates in various sectors, including food retail, pharmacy, and apparel, providing a wide array of products ranging from groceries and fresh produce to health and wellness items.

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 demonstrates strong financial performance with consistent revenue growth, solid profitability, and efficient cash flow generation. The company maintains healthy margins and returns on equity, although 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	7.26B	6.90B	6.64B	6.17B	5.80B	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: 61.61
• 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:L, the sentiment is Positive. The current price of 61.61 is below the 20-day moving average (MA) of 61.87, above the 50-day MA of 58.89, and above the 200-day MA of 55.22, indicating a neutral trend. The MACD of 0.74 indicates Positive momentum. The RSI at 53.38 is Neutral, neither overbought nor oversold. The STOCH value of 30.34 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	78 Outperform	C$21.17B	21.31	14.48%	1.49%	3.71%	12.40%
L	78 Outperform	C$72.30B	29.56	21.51%	1.53%	4.21%	14.03%
DOL	75 Outperform	$55.37B	42.85	102.01%	0.20%	14.02%	20.11%
WN	70 Outperform	C$36.20B	24.76	26.36%	1.23%	4.15%	149.50%
EMP.A	69 Neutral	C$10.57B	15.57	12.66%	1.82%	2.58%	7.85%
SAP	63 Neutral	C$16.73B	-206.17	-1.32%	1.90%	5.37%	-135.85%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%

Loblaw Companies Corporate Events

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.

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.