Dollarama will release its next quarterly financial results on March 29. (Photo: 123RF)
What to do with Dollarama, Nuvei and WSP Global securities? Here are some recommendations from analysts likely to move prices soon. Note: the author may have a totally different opinion from that expressed by the analysts.
Dollarama (DOL, $77.78): a compelling backdrop
Dollarama will release its fourth-quarter fiscal 2023 financial results on March 29 before stock markets open, and RBC Capital Markets analyst Irene Nattel expects earnings per share of $0.87.
His expectations are slightly more optimistic than the analyst consensus, which calls for a figure of $0.85.
It also forecasts revenues of nearly $1.4 billion, which would be up 9.8% year-on-year and 15.8% from their level in the same period in 2019, before the start. of the pandemic.
The RBC analyst also expects earnings before interest, taxes and amortization, including the company’s stake in Latin American retailer Dollarcity, of $451.7 million (consensus at $445.2 million).
Irene Nattel expects same-store sales growth (open for more than a year), a key measure of retailers’ financial health, to reach 9.8%, recalling that the fourth quarter of 2022 had been affected by the COVID-19 pandemic.
“Management’s feedback in mid-January that the supply chain was returning to normal and consumer demand continued to be robust across all categories supports our guidance for fiscal 2024 and 2025”, adds the analyst.
The latter specifies that the arrival of products costing up to five dollars during the second quarter accelerated in the second half of the year. The full impact of their arrival will therefore be felt during the 2024 financial year.
In his opinion, the return to normal in the supply chain will also allow Dollarama to curb the erosion of its profit margins, as delivery times decrease and container shipping prices return to their pre-pandemic level.
The analyst also points out that Dollarama repurchased 2.8 million of its shares during the fourth quarter, at a total price of $230.5 million. The bill for these redemptions for the whole of the financial year amounts to $689 million.
Irene Nattel reiterates her recommendation of “outperformance” on the title of Dollarama and its target price over one year of $95.
(Denis Lalonde)
