LIQUOR STORES NA LTD 4.70 PCT DEBS T.LIQ.DB.B

Liquor Stores NA rated "buy" in new coverage

[kijiji]

The Globe and Mail reports in its Thursday, Sept. 1, edition that M Partners analyst Steven Salz says Liquor Stores NA offers investors an "attractive" price upside and income opportunity with "significant" embedded operating leverage not currently priced in. The Globe's David Leeder writes in the Eye On Equities column that Mr. Salz initiated coverage with a "buy" rating. Mr. Salz set a target of $13. Analysts on average target the shares at $10.67. Mr. Salz says in a note: "Liquor Stores brought in a top tier management team just before the oil downturn, which in our view has smoke screened underlying operational improvement, providing meaningful torque to the upside. New management has taken a liquor store business run like a utility, and is applying best retail practices: renovating its store base, investing in sales staff, implementing a more efficient IT & inventory platform, and diversifying into new geographies away from resource markets. This investment has resulted in temporary EBITDA margin compression, which we believe the market has mistook as wholly attributable to the oil rout." The Globe's Norman Rothery was bullish on Liquor Stores on March 11. The shares were then worth $7.87.