Dollarama will release its fourth quarter 2023 results on Wednesday. (Photo: 123RF)
What to do with the securities of Dollarama, Canadian National and dentalcorp Holdings? 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, $78.72): Although it expects moderate sales growth, profits will be there, Scotia Capital analyst believes
Investors shrank somewhat from shares of the discount retailer which have underperformed the S&P/TSX index and are down 2% year-to-date, notes Scotia Capital analyst George Doumet.
Although he expects some moderation in sales, the analyst still expects to see above-average growth in adjusted earnings per share for his fiscal year 2024, a result that will be made possible by a expansion of gross margins, mainly during the 2nd half of the year.
The analyst believes that Dollarama offers an inexpensive opportunity to own a stock that combines strong growth and defensive attributes. His recommendation is to “outperform the sector”, and his target price is $93.
Dollarama will release its fourth quarter 2023 results on Wednesday. The analyst expects management to announce revenues of $1.41 billion, up 14.7% from the previous year, an increase attributable to the opening of 64 new stores and growth in comparable sales of 9.6%.
Earnings before interest, taxes, depreciation and amortization will hit $448 million and earnings per share $0.85, he said, broadly in line with analyst consensus forecasts. It further forecasts that the gross profit margin will be 44%, compared to 45.2% last year, a decline attributable to an increase in sales of lower-margin products, as well as higher logistics costs. .
For the full fiscal year 2024, the analyst forecasts for Dollarama adjusted earnings per share of $3.25, thanks in part to revenue growth of 10.5% and a gross margin of 44%.