Yesterday, Loblaw Companies (TSE:L) found itself in a bit of a slide despite some impressive earnings results and some new plans to bring in brands that few, if any, other stores could get their hands on. Now, Loblaw is up despite the fact that some of its workers are planning to strike. Loblaw stock is actually up over 2% in Thursday afternoon’s trading.
Ontario No Frills grocery stores—part of the Loblaw lineup—could see more than 1,200 employees walk out of 17 different stores if a new agreement is not reached by 12:01 AM Monday morning.
The workers’ union in question, Unifor, noted that Loblaw would have to come “prepared to raise wages and improve working conditions for these grocery store workers” in order to keep the stores open and functioning as normal. While the talks are still ongoing, the union admits, it also admits that the union is ready to strike.
Troubling Conditions All Around
The strikes would come at a terrible time; Canada, in general, is facing what it calls an “affordability crisis,” which means pretty much what you’d think it means. Things cost more, and salaries aren’t going up to match the rising costs. So, of course, workers want to get paid more; the whole point of working is to afford living, after all.
But by the same token, businesses need to make money to pay those workers, among other things. However, with customers cutting back, the money in question isn’t always there — for the business or the workers. Either way, a standoff is approaching, and it remains to be seen who will blink first. Loblaw is also working to fight what it calls “organized retail crime,” a move that may help it save some cash from shrinkage loss.
Is Loblaw Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on L stock based on two Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 12.87% rally in its share price over the past year, the average L stock price target of C$145 per share implies 18.05% upside potential.
