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Investing.com - BMO Capital maintained its Market Perform rating and C$220.00 price target on Loblaw Companies (TSX:L) (OTC:LBLCF) ahead of the company’s second-quarter earnings report.
The firm slightly adjusted its Q2/25 earnings per share estimate to C$2.33 from C$2.32, which remains just above the consensus estimate of C$2.32. BMO increased its pharmacy same-store sales forecast but lowered share buyback expectations based on SEDI disclosure data.
BMO expects Loblaw to show good quarter-over-quarter acceleration in food same-store sales, exceeding Street expectations due to higher food inflation and improved tonnage. The firm also anticipates continued non-same-store sales food growth in Q2, likely maintaining a similar year-over-year pace as seen in Q1/25.
Despite these adjustments, BMO indicated there were "no material changes" to its outlook on Loblaw’s fundamental business performance. The firm noted the stock trades at 22 times its 2026 estimated earnings per share.
For comparison, BMO highlighted that competitors Metro (TSX:MRU) and Empire Company (TSX:EMP.A) trade at lower multiples of 16x and 14x, respectively, with Metro rated Outperform at a C$106.07 price target and Empire rated Market Perform at C$56.38.
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