As a long term investor, I added a few more yesterday near the closing price. GLTA
A number of analysts adjusted their price targets on shares of Alimentation Couche-Tard Inc. after a mixed fiscal second quarter earnings report this week and a hike to its annual dividend.
The company reported adjusted EBITDA of $1.455-billion, beating consensus estimates of $1.443-billion, although its adjusted earnings per share of 82 cents slightly missed the consensus of 84 cents.
Couche-Tard announced a 27.3% hike to its annual dividend to 56 cents a share, which equates to a 1% dividend yield based on the current share price.
Analysts were impressed with the convenience store operator’s fuel margins and growth in U.S. and European same-store sales.
“ATD’s 2Q results were impacted by factors that are partly transitory while the underlying results show strong execution of organic growth initiatives and resilient consumer demand,” said Desjardins Securities analyst Chris Li.
He said he remains positive on the share price outlook for next year, believing cash flows from fuel margins should remain strong. He also thinks there’s potential for the company to make more acquisitions and buy back more shares. Mr. Li, who maintained a “buy” rating and C$69 price target on the stock, also thinks shares will benefit from funds flowing to consumer staples over the coming year.
Elsewhere, Canaccord Genuity raised its price target to C$68 from C$65, CIBC lowered its target to C$73 from C$75, and National Bank cut its target to C$67 from C$69.
“We reiterate our favourable view on ATD, which reflects increasing confidence that fuel margins will continue to show strength (improvement initiatives) and potential for future acquisitions,” commented National Bank analyst Vishal Shreedhar. He noted the stock is trading inline with its five year average based on forward EPS earnings estimates, and believes the company “has latitude” to complete and acquisition with an enterprise value as high as US$15 billion without issuing more equity.