Loblaw Companies (L) AI Stock Analysis

• Market Cap: C$65.74B
• Dividend Yield: 1.02%
• Average Volume (3M): 334.90K
• Price to Earnings (P/E): 30.4
• Beta (1Y): 0.44
• Revenue Growth: 2.42%
• EPS Growth: 7.04%
• Country: CA
• Employees: 220,000
• Sector: Consumer Defensive
• Sector Strength: 55
• Industry: Grocery Stores
• EPS (TTM): 1.88
• Shares Outstanding: 298,370,450
• 10 Day Avg. Volume: 286,779
• 30 Day Avg. Volume: 334,899
• PEG Ratio: 3.40
• Price to Book (P/B): 3.48
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 12.34
• 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$236.85
• Price Target Upside: 7.50% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

• Rating: 78 Outperform
• Price Target: C$259.00 ▲(17.56%Upside)

Loblaw Companies' strong financial performance and strategic expansions drive its high stock score. Despite bullish technical indicators, high valuation metrics and inflationary pressures pose risks. Continued monitoring of debt levels is advised.

Positive Factors

Expansion and Growth

Management has indicated a larger number of new food stores will be opened in 2025, contributing to sales growth.

Sales Performance

Analyst expects good quarter-over-quarter acceleration in food same-store sales, driven by higher food inflation and better tonnage.

Negative Factors

Financial Concerns

Estimates are being trimmed due to balance sheet concerns, indicating potential financial challenges.

Operating Expenses

Loblaw is facing two material company-specific headwinds on operating expenses this year with more new store launches and distribution center ramp.

Loblaw Companies Business Overview & Revenue Model

Company Description

Loblaw Companies Limited is Canada's largest food retailer and a leading provider of pharmacy, health and beauty, apparel, general merchandise, financial services, and wireless mobile products and services. Operating through a network of corporate and independently operated stores, Loblaw offers a wide range of products under various banners, including Loblaws, No Frills, and Shoppers Drug Mart. The company is known for its private label brands such as President's Choice and No Name, which are staples in Canadian households.

How the Company Makes Money

Loblaw Companies Limited generates revenue primarily through the sale of groceries and other consumer goods in its extensive network of retail stores across Canada. The company's key revenue streams include food retailing, which encompasses both perishable and non-perishable goods, pharmacy sales through Shoppers Drug Mart, and financial services offered via its PC Financial brand. Loblaw also earns income from its private label products, which often have higher margins than national brands. Additionally, the company benefits from its loyalty program, PC Optimum, which drives customer retention and spending. Strategic partnerships, such as those with healthcare providers and technology companies, enhance its service offerings and contribute to overall profitability.

Loblaw Companies Financial Statement Overview

Summary

Loblaw Companies exhibits strong financial health with consistent revenue and earnings growth, stable margins, and robust cash flow generation. Despite balanced leverage, increasing debt levels require monitoring.

Income Statement

Loblaw Companies shows strong financial performance with consistent revenue growth, increasing from $52.7 billion in 2020 to $61.6 billion in TTM 2025. The gross profit margin has remained stable, indicating efficient cost management. The net profit margin improved slightly over the period, reflecting better operational efficiency. EBIT and EBITDA margins have also shown improvement, suggesting effective management of operational expenses.

Balance Sheet

The company's balance sheet reflects a moderate debt-to-equity ratio, which suggests a balanced approach to leveraging. Stockholders' equity has been stable, indicating financial resilience. The equity ratio is healthy, showcasing a strong asset base. However, the increasing total debt over the years poses a potential risk that needs to be monitored.

Cash Flow

Loblaw Companies demonstrates robust cash flow management, with a steady increase in operating cash flow and free cash flow over the years. The free cash flow to net income ratio is strong, indicating efficient conversion of earnings into cash. The free cash flow growth rate is positive, supporting potential future investments and debt servicing.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	61.57B	61.01B	59.53B	56.50B	53.17B	52.71B
Gross Profit	19.89B	19.73B	19.04B	17.98B	16.73B	15.99B
EBITDA	6.94B	6.90B	6.64B	6.17B	5.79B	4.96B
Net Income	2.21B	2.17B	2.10B	1.92B	1.88B	1.11B
Balance Sheet
Total Assets	40.00B	40.88B	38.98B	38.15B	36.61B	35.87B
Cash, Cash Equivalents and Short-Term Investments	1.94B	2.11B	1.95B	1.93B	2.44B	1.94B
Total Debt	19.37B	19.18B	18.17B	17.61B	16.55B	16.61B
Total Liabilities	28.89B	29.61B	27.36B	26.69B	24.88B	24.75B
Stockholders Equity	10.96B	11.09B	11.46B	11.30B	11.57B	10.99B
Cash Flow
Free Cash Flow	3.75B	3.60B	3.58B	3.18B	3.65B	4.03B
Operating Cash Flow	5.80B	5.80B	5.65B	4.75B	4.83B	5.19B
Investing Cash Flow	-2.37B	-2.02B	-1.84B	-2.37B	-1.27B	-1.38B
Financing Cash Flow	-3.79B	-3.82B	-3.93B	-2.75B	-3.25B	-3.28B

Loblaw Companies Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 220.32
• 50DMA: Negative
• 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 Neutral. The current price of 220.32 is below the 20-day moving average (MA) of 223.66, below the 50-day MA of 223.37, and above the 200-day MA of 195.98, indicating a neutral trend. The MACD of -0.02 indicates Positive momentum. The RSI at 44.45 is Neutral, neither overbought nor oversold. The STOCH value of 39.65 is Neutral, 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
EMP.A	80 Outperform	C$12.88B	18.88	13.02%	1.44%	1.77%	0.77%
L	78 Outperform	C$65.74B	30.37	20.10%	1.02%	2.42%	7.04%
MRU	78 Outperform	C$22.69B	23.29	14.26%	1.42%	2.31%	4.45%
WN	76 Outperform	C$34.64B	30.38	19.58%	1.36%	2.36%	-6.97%
SAP	70 Outperform	C$11.38B	42.30	-2.51%	2.76%	9.91%	-165.83%
Sector *	65 Neutral	$26.77B	15.22	-4.18%	3.21%	1.01%	1.53%
NWC	65 Neutral	C$2.30B	16.68	18.85%	3.33%	4.19%	2.56%

Loblaw Companies Corporate Events

Loblaw Companies Confirms Board of Directors Election

Loblaw Companies Limited announced the election of its board of directors at the annual shareholders’ meeting. All nominated directors were elected, indicating strong shareholder support and stability in the company’s governance. This election is crucial for maintaining strategic direction and ensuring continued leadership in the Canadian retail market.

Loblaw Reports Strong Q1 2025 Financial Results with Strategic Expansion

Loblaw Companies Limited reported a 4.1% revenue growth and a 9.3% increase in adjusted diluted net earnings per share for the first quarter of 2025. The company achieved strong sales momentum through customer response to value offerings and loyalty programs, with notable growth in both food and drug retail segments. Loblaw’s strategic expansion included opening new stores and clinics, contributing to its market share gains and financial performance.