01:51 PM EDT, 04/10/2024 (MT Newswires) -- Metro reports Q2/F24 results on April 24.

National Bank's Vishal Shreedhar is projecting a 2.9% y/y EPS decline in Q2/F24 to reflect slight gross margin contraction, SG&A deleveraging, higher D&A and higher interest expense, partly offset by share repurchases, resilient discount format performance and strength at PJC.

Metro has outperformed peers in real sssg (tonnage) in recent quarters and National expects this trend to continue, although Q2/F24 sssg is expected to be impacted by the Christmas weekend falling in Q1 this fiscal year vs. in Q2 last fiscal year (moderates sssg by 2.7%). Adjusted for this shift, National models "flattish" tonnage versus Loblaw's most recent quarter at -2.9% and Empire at -2.2%. Also modeling 3.2% sssg in PJC (0.5% in front end and 5.0% in Rx).

"We believe that Metro is a solid company which has delivered superior longterm performance supported by strong execution and capital allocation; however, these favourable attributes are adequately reflected in valuation, in our view."

Maintain Sector Perform rating; price target is $80

Price: 71.21, Change: -0.49, Percent Change: -0.68