Earlier today, Loblaw Companies (TSE:L) (OTC:LBLCF) announced its Q2-2023 earnings results, which beat expectations. Earnings per share (EPS) of C$1.94 beat the consensus forecast of C$1.91 and grew by 14.8% year-over-year. Additionally, revenue of C$13.738 billion beat expectations of C$13.626 billion, rising by 6.9% compared to Q2 2022. Nonetheless, the stock is trending lower today.
The company’s 6.7% growth in Food Retail sales was primarily due to the consumer shift towards discount stores, a preference for Loblaw’s private label brands, and personalized PC Optimum™ offers. Both drug front-store and pharmacy sales continued to be robust as well, particularly for beauty products.
Also, while Loblaw’s Retail free cash flow was -C$600 million and the segment’s gross margin of 31.3% fell by 30 basis points year-over-year, the firm still repurchased 4.2 million shares for a total of C$511 million, reflecting management’s confidence. Also, E-Commerce sales rose by an impressive 13.9%, and adjusted EBITDA increased by 9.4% to C$1.64 billion.
Is Loblaw Stock a Buy, According to Analysts?
According to analysts, Loblaw stock has a Moderate Buy consensus rating based on two Buys and two Holds assigned in the past three months. The average Loblaw stock price target of C$153.41 implies 30.7% upside potential. Analyst price targets range from a high of C$171.54 to a low of C$133.32.
If you’re wondering which analyst you should follow if you want to buy and sell Loblaw stock, the most profitable analyst covering the stock (on a one-year timeframe) is Irene Nattel of RBC Capital, with an average return of 15.35% per rating and an 82% success rate. Click on the image below to learn more.
