Analysts rate Loblaw Companies Limited (L:CA:TSX) with a Buy, $107 Target

STA Research
by: STA Research

Analysts rate Loblaw Companies Limited with a consensus Buy rating and a 12-month average target price of $107.14 per share.

Morningstar rates Loblaw Companies with an Underperform rating, and  maintained the company’s stock with a  $86 target price.

Based on the Loblaw Companies Limited stock forecasts from 10 analysts, the average analyst target price for Loblaw Companies Limited is CAD 107.14 over the next 12 months. Loblaw Companies Limited’s average analyst rating is Buy. Stock Target Advisor’s own stock analysis of Loblaw Companies Limited is Slightly Bearish, which is based on 4 positive signals and 7 negative signals. At the last closing, Loblaw Companies Limited’s stock price was CAD 114.02. Loblaw Companies Limited’s stock price has changed by -0.85% over the past week, +15.20% over the past month and +71.10% over the last year.

Loblaw Companies Limited, a food and pharmacy company, engages in the grocery, pharmacy, health and beauty, apparel, general merchandise, financial services, and wireless mobile products and services businesses in Canada. It operates in two segments, Retail and Financial Services. The company was founded in 1919 and is headquartered in Brampton, Canada. Loblaw Companies Limited operates as a subsidiary of George Weston Limited.

What we like:

High market capitalization

This is one of the largest entities in its sector and is among the top quartile. Such companies tend to be more stable.

Superior return on equity

The company management has delivered better return on equity in the most recent 4 quarters than its peers, placing it in the top quartile.

Positive cash flow

The company had positive total cash flow in the most recent four quarters.

Positive free cash flow

The company had positive total free cash flow in the most recent four quarters.

What we don’t like:

Poor risk-adjusted returns

This company is delivering below median risk-adjusted returns in its peers. Even if it is outperforming on returns, the returns are unpredictable. Proceed with caution.

High volatility

The total returns for this company are volatile and above median for its sector over the past 5 years. Make sure you have the risk tolerance for investing in such stock.

Below median total returns

The company has underperformed its peers on annual average total returns in the past 5 years.

Overpriced on a cash flow basis

The stock is trading high compared to its peers on a price to cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering buying.

Poor return on assets

The company management has delivered below median return on assets in the most recent 4 quarters compared to its peers.

Highly leveraged

The company is in the bottom half compared to its sector peers on debt to equity and is highly leveraged. However, do check the news and look at its sector and management statements. Sometimes this is high because the company is trying to grow aggressively.

Low Revenue Growth

This stock has shown below median revenue growth in the previous 5 years compared to its sector.

 

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