UBS initiates coverage on Loblaw, Dollarama and Alimentation Couche-Tard

Dollarama

13/12/2024 15:35

** UBS initiates coverage on Canadian retailers Loblaw
 L.TO , Dollarama  DOL.TO  and Alimentation Couche-Tard  ATD.TO 
    ** Brokerage assigns "buy" rating to ATD, says company's
proven ability to consolidate convenience stores and control
costs sets it up well; says shares are undervalued, sets PT at
C$97
    ** Notes ATD's multiple initiatives to support profitability
growth, including Inner Circle loyalty program, and move to
consolidate its U.S. fuel operations under the Circle K banner
    ** UBS rates DOL as "neutral", says company is a very strong
retailer, but valuation looks full; PT C$147
    ** DOL can secure competitive prices from vendor on
competition between brands to get on its shelves, brokerage
says; sees continued operating margin expansion driven largely
by its Latin American retailer Dollarcity's growth
    ** Brokerage rates Loblaw as "buy", says company's scale,
profit growth opportunities are unmatched in Canadian grocery,
and its strong footprint, favorable demographics support market
growth; sees shares as undervalued, PT C$225
    ** Up to Thursday's close, ATD, DOL and Loblaw stocks up
about 3%, 48% and 52%, respectively, YTD

 (Reporting by Neil J Kanatt in Bengaluru)
 ((Neil.JKanatt@thomsonreuters.com))