Online sales of Canadian Tire Corporation banners totaled $ 450 million in the quarter.
What to do with the titles of Savaria, Canadian Tire and Quebecor? Here are some recommendations from analysts that may move prices in the near future. Note: the author may have a totally different opinion from that expressed.
Savaria (SIS, $ 18.30): annual sales of $ 1 billion in 2025?
Savaria reported better-than-expected financial results in the first quarter and the maker of accessibility products for people with reduced mobility should continue its momentum in the second quarter, believes analyst Frédéric Tremblay of Desjardins.
“As the Handicare acquisition was finalized at the end of March, we believe the second quarter will be an inflection point for the business, with a return to organic growth in the accessibility industry. », Notes Mr. Tremblay.
In the first quarter, Savaria reported revenues of $ 112.1 million ($ M) and earnings before taxes, interest, and amortization (EBITDA) of $ 17.3 million, which is higher than the figures of 104, $ 9M and $ 16M expected by the analyst.
After the second quarter, Mr. Tremblay anticipates that Savaria will continue its momentum thanks to the synergies achieved following the acquisition of Handicare and the gradual reopening of borders.
“After the second quarter, we anticipate that the demand for residential elevators and stair seating will remain robust, as the reopening of economies around the world will stimulate demand for accessibility products in shopping malls, schools. and healthcare facilities as many postponed projects will eventually get the green light, ”he believes.
“Management is delighted with Handicare’s performance since the acquisition and execution related to synergies,” adds Frédéric Tremblay.
The analyst specifies that Savaria‘s management still expects Adjusted EBITDA to exceed $ 100M in 2021, which has raised its expectations to $ 104M, which were $ 102.2M.
He notes in passing that management is eyeing $ 1 billion in annual revenue by 2025, focusing on growth of nearly 10% per year and through a few acquisitions.
Frédéric Tremblay reiterates his buy recommendation on the stock and raises its target price over one year from $ 22 to $ 24.
Canadian Tire (CTC.A, $ 212.84): Strong Results Driven by Higher Online Sales
Retailer Canadian Tire Corporation delivered far better than expected financial results in the first quarter with earnings per share of $ 2.57, while analyst consensus was on a performance of $ 0.62.
For his part, analyst Vishal Shreedhar of the National Bank Financial (NBF), expected a result of $ 0.73. At the same time last year, the company had instead taken a loss of $ 0.13 per share.
Consolidated revenues reached $ 3.32 billion, compared to $ 2.85 billion last year. Vishal Shreedhar was banking on more modest revenue growth to $ 2.89 billion this year.
The analyst points out that the sales of comparable stores (open for more than a year) of the Canadian Tire banner increased by 19.2% (NBF: 3%), while those of the Marks’s and Sport Check banners climbed respectively. 22% (NBF: 7%) and 18.7% (NBF: 2%).
Canadian Tire, which also owns the Atmosphere, Sports Experts, Hockey Experts and Sports Rousseau banners, saw its retail division’s earnings before taxes, interest, depreciation and amortization (EBITDA) stand at $ 492 million, while the NBF was betting on an amount of 337 million dollars.
“In the second quarter, the company will continue its momentum, although comparisons with last year will be more difficult,” warns Vishal Shreedhar.
In his view, after a good first quarter, investors will see if this performance can last in a post-pandemic environment, as Canadian Tire management said it had a good April.
Mr. Shreedhar points to the 275% average year-over-year increase in online sales across all of its banners, which was almost 400% for the Canadian Tire chain. Online sales totaled $ 450 million during the quarter.
The analyst also welcomes the fact that the Triangle Rewards loyalty program saw gains in the quarter, with the addition of more than 400,000 new members, as average spending of active members increased. by 15% over one year.
The analyst renews his recommendation of “outperformance” on the stock and raises its target price over one year to 219 dollars, which was 201 dollars.
Quebecor reported first quarter results in line with Royal Bank analyst Drew McReynolds’ forecasts.
“We expect Quebecor to deliver industry-leading growth in net asset value through the proper integration of wired and wireless networks,” writes the analyst.
Mr. McReynolds adds that the plans for several services of its Videotron subsidiary are very effective and that the company is gaining market share with its Fizz Mobile and Fizz Internet services.