Canadian Stock Worth Your Attention By TipRanks
Alimentation Couche-Tard (ATD.B) is probably a name most investors have never heard of. American investors may find it a Canadian-exclusive that is worth their time.
Couche-Tard is an American convenience store chain based in Quebec. It is best known for the Circle K banner. The company has been very successful with its growth-by-acquisition strategy, which has not worked out for many firms lacking discipline.
Couche-Tard has a strategy to reach different parts of the globe and is able to grow quickly, even though its market capital is growing to mega-cap. The industry is still fragmented from a global standpoint.
Circle K is not just an owner of convenience shops or gas stations. The company has one of Canada’s best management teams.
Couche-Tard shares are extremely attractive to me. (See ATD.B stock charts on TipRanks)
Value in the great north?
Couche-Tard stock is valued at 15.7 times its earnings multiple. Due to the lack of deals in today’s market, investors haven’t seen as much company wheeling and dealing. Couchetard seems to be a stock investors discount because of one or more reasons.
Perhaps it’s the low-tech business model, the disruptive impact of EVs on gas stations, or less frequent M&A activity?
Couche-Tard has the potential to grow its net profit. Couche-Tard is a stock that has many advantages, including acquisitions and same-store growth initiatives.
Shrinkflation: A Potential Catalyst?
Nothing can compare to the power and influence of a great brand. The continued growth of off- and private-label products can’t be ignored.
Inflation has caused shrinkflation, not only price rises for food products. Consumer-packaged goods producers aren’t increasing their prices but decreasing the number of products they sell.
Couche-Tard’s private label may see a boost as more consumers notice the shrinkflation in the snacks aisle. Because they are less expensive than brands, private-label products can be more competitive with branded ones. They also help to mitigate the impact of wider shrinkflation.
Couche-Tard’s private label has great potential to increase margins. Couche-Tard has the potential to increase its margins as consumers become more aware of the brand’s quality and seek out a higher value. The company is continuing its aggressive growth strategy.
Wall Street’s Take
According to TipRanks’ consensus analyst rating, ATD.B stock comes in as a Moderate Buy. There are 8 Buy recommendations and 4 Hold recommendations out of the 12 analysts’ ratings.
The average ATD.B price target is C$57.33. Price targets for analyst shares range between C$45 and C$75.
Disclosure: Joey Frenette was the owner of shares in Alimentation Couche-Tard when this article was published.
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