Canadian Tire Corporation Limited (CTC-A:TSX) CIBC lowers the target price to $214

STA Research
by: STA Research
Canadian Tire Corporation Limited

CIBC maintains Canadian Tire Corporation Limited with an Outperform rating and lowers the target price to $214 from $216 on the company’s stock.

Based on the Canadian Tire Corporation Limited stock forecasts from 10 analysts, the average analyst target price for Canadian Tire Corporation Limited is CAD 220.41 over the next 12 months. Canadian Tire Corporation Limited’s average analyst rating is Strong Buy. Stock Target Advisor’s own stock analysis of Canadian Tire Corporation Limited is Slightly Bearish, which is based on 4 positive signals and 7 negative signals. At the last closing, Canadian Tire Corporation Limited’s stock price was CAD 171.65Canadian Tire Corporation Limited’s stock price has changed by +1.85% over the past week, +0.89% over the past month and -14.42% over the last year.

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.

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.

Superior Revenue Growth

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

What we don’t like:

Below median total returns

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

Below median dividend returns

The company’s average income yield over the past 5 years has been low compared to its peers. However, it is not a problem if you are not looking for income.

Poor capital utilization

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

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.

Overpriced on free cash flow basis

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

Low Earnings Growth

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

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