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Research Alert: CFRA Lowers Opinion On Canadian Tire Corporation Shares To Sell From Hold
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Research Alert: CFRA Lowers Opinion On Canadian Tire Corporation Shares To Sell From Hold
Aug 7, 2025 10:36 AM

01:05 PM EDT, 08/07/2025 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We lower our 12-month target to CAD145 from CAD165, based on a 2026 P/E of 10.2x, a justified discount to CTC's five-year average forward P/E of 11.6x. We lower our adjusted EPS estimates to CAD12.85 from CAD13.60 for 2025 and to CAD14.25 from CAD14.60 for 2026. We lower our opinion to Sell following CTC's Q2 miss on concerns related to near-term earnings growth due a variety of factors - incremental costs related to infrastructure and its True North plan, as well as the impact of increased tariffs on margins. While CTC's Q2 same-store-sales growth of 5.6% came in well ahead of the 3.6% consensus, we have concerns regarding consumer spending in the coming quarters, as Canadian GDP growth appears to have slowed materially over the last few months, driven by a steep drop in exports. We think the combination of weaker top-line growth and higher costs could spell margin contraction for a company that already possesses a poor earnings track record (CTC has beat only 42% of the time over the past three years).

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