RE:This bump in the roadRBC reiterate their $94. price target.
RBC have a positive view on Alimentation Couche-Tard (ATD) despite some near-term challenges from weaker consumer demand, especially from low-income customers.
- They expect ATD's sales growth and profit margins to be impacted in the first half of fiscal 2025 due to these consumer pressures, but remain optimistic about the company's long-term prospects.
- Key points from ATD's recent call:
1) Fuel margins were temporarily lower, but should rebound back to normal levels.
2) Consumer headwinds are expected to ease after the first half of next year.
3) Investments in pricing for cigarettes are offsetting improved food profitability.
4) Cost-cutting initiatives are helping reduce expenses.
5) ATD continues to pursue acquisition opportunities, especially in the U.S.
- The analysts reiterate their recommendation to buy ATD stock, seeing potential for improvement in sales, margins, integration of recent acquisitions, and merger synergies.
In summary, while facing some near-term consumer challenges, the analysts remain positive on ATD's long-term outlook and growth prospects through organic initiatives and acquisitions.