S&P 500 slips, but losses kept in check as Nvidia climbs ahead of results
On Thursday, UBS analyst Mark Carden adjusted the price target for Metro Inc . (TSX:MRU:CN) (OTC:MTRAF), increasing it to Cdn$105.00 from the previous Cdn$99.00, while maintaining a Neutral rating on the stock. The revision followed Metro Inc.’s second-quarter earnings report, which revealed strong performance in the company’s core business areas.
Metro Inc.’s second-quarter results demonstrated the strength of its food and pharmacy segments, with same-store sales (SSS) growth of 5.3% in food and 7.0% in pharmacy. These figures exceeded both UBS’s and consensus estimates. The company’s resilience is particularly notable given the macroeconomic uncertainty during the quarter.
Despite the positive performance, the stock’s muted reaction was highlighted. Carden pointed out that while Metro Inc. has not experienced significant effects from tariffs and counter-tariffs, nor shifts in consumer shopping patterns, the second quarter, which ended on March 15, only included a brief period of tariff volatility. The situation regarding tariffs is described as ’very fluid.’
Metro Inc. has been proactive in dealing with potential tariff impacts by collaborating with vendors and sourcing products from alternative countries when possible. This strategy has helped the company to navigate the current economic landscape without substantial disruption to its operations.
While the company’s ability to manage external pressures has provided some reassurance to investors, there was an observation of potential disappointment due to the lack of operational expenditure leverage despite the strong sales growth. This suggests that while sales are on the rise, the costs associated with maintaining and growing operations have not proportionally decreased.
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