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On Wednesday, BMO Capital Markets revised its outlook on Metro Inc . (TSX:MRU:CN) (OTC: MTRAF), upgrading the stock from Market Perform to Outperform and increasing the price target from Cdn$92.00 to Cdn$96.00. The adjustment came after the stock experienced a pullback following the company’s first quarter fiscal year 2025 results.
The analyst at BMO Capital Markets, Tamy Chen, cited the unchanged medium-term company fundamentals as a key reason for the upgrade. Despite the recent stock price decline, the core aspects of the business are believed to remain solid. The firm also adjusted its forecast for food inflation upwards, which is expected to contribute to stable sector dynamics, particularly in light of the anticipated slowdown in population growth.
The revised price target is based on an 18 times multiple of BMO’s revised fiscal year 2026 estimated earnings per share for Metro. This new valuation reflects an increased confidence in the company’s ability to maintain its market position and financial performance in the coming years.
Additionally, the analyst expressed concern over the potential impact of increasing tariff rhetoric. In a scenario where trade tensions escalate, BMO Capital Markets suggests that investors would benefit from having exposure to a high-quality staple name like Metro Inc., which could offer a degree of resilience in a challenging economic environment.
BMO Capital Markets’ updated stance on Metro Inc. presents a positive outlook for the company, reflecting expectations for steady performance amidst a backdrop of rising food prices and potential global trade challenges. The firm’s recommendation suggests that despite recent market fluctuations, Metro’s underlying business remains robust and well-positioned for the future.
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