Analyst Recommendations for Metro, Disney, and WSP: Key Factors Influencing Stock Prices

2023-11-02 21:21:55

Metro will reveal its next quarterly results on November 15. (Photo: 123RF)

What to do with titles from Metro, Disney and WSP? Here are some analyst recommendations likely to move prices soon. Note: the author may have an opinion completely different from that expressed.

Metro (MRU, $71.47): great momentum obscured by a strike

The grocer and pharmacist Metro, which also owns the Jean Coutu and Brunet chains, will reveal the financial results for the fourth quarter of its 2023 fiscal year on November 15.

For the months of July, August and September, National Bank Financial analyst Vishal Shreedhar forecasts that Metro will report adjusted earnings per share of $1.07, up 17.1% year-on-year. , which is slightly below analysts’ consensus of $1.09.

In the corresponding period a year ago, Metro reported adjusted earnings per share of $0.92.

“The results for the 4th quarter of 2023 will benefit from a week longer than last year, but will be obscured by a strike,” he said, adding that pharmacy profit margins and operational efficiencies would be offset in part by a tightening of margins in food and the costs of the strike which hit 27 establishments in the Greater Toronto Area from the end of July to the end of August.

“We believe that same-store sales (open for more than a year) of grocery stores will increase by 4%, which compares to an increase of 8% a year ago. For pharmacies, the increase should be 1.5% for the commercial section and 4% for prescription drugs,” he estimates.

Vishal Shreedhar expects Metro’s revenues to reach $4.93 billion, compared to the consensus of $5.08 billion. They were $4.43 billion last year.

Earnings before interest, taxes, depreciation and amortization (EBITDA) should reach $492 million, compared to $441 million a year ago (consensus at $496 million).

“Food inflation reached 7.1% during the quarter, which compares to 9.2% during the previous three months. We believe that discount and private label products will continue to ‘outperform’ for the period, meaning that customers have maintained their value-oriented shopping habits,” he explains.

The analyst believes that Metro is a solid company that has delivered superior long-term performance, thanks to good execution and good capital allocation. However, according to him, all these elements are fully reflected in the current valuation of the stock.

It reiterates its recommendation of “performance equal to the sector” and its one-year target price of $83, giving it a value of 11 times the company’s forecast EBITDA for the 2025 financial year.

Denis Lalonde