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On Monday, BMO Capital maintained a Market Perform rating on Loblaw Companies (TSX:L) (OTC:LBLCF), while increasing the price target to Cdn$200 from Cdn$180. The adjustment was attributed to a slight tweak in earnings per share (EPS) forecasts following an updated share buyback plan. The firm anticipates a quarter-over-quarter improvement in both food and front-of-store same-store sales (SSS), echoing management’s previous quarter commentary.
Loblaw’s forthcoming commentary on current consumer behavior is highly anticipated, especially considering recent earnings from Metro Inc . (TSX:MRU), which showed no significant change in consumer patterns, aside from a noted preference for Canadian products. BMO Capital’s analyst stated that they expect Loblaw to meet its financial goals for the year 2025.
The revised price target of Cdn$200 reflects a target multiple increase to approximately 20 times from 18 times the firm’s projected 2026 EPS. This change suggests confidence in Loblaw’s ability to sustain its financial performance in the coming years.
The analyst’s commentary highlighted the importance of Loblaw’s upcoming statements regarding consumer trends, which could provide further insights into the company’s performance and strategy in adapting to market demands. The raised target price is a reflection of the analyst’s updated valuation model and expectations for the company’s future earnings.
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