In a report released today, Tamy Chen from BMO Capital downgraded Canadian Tire to a Hold, with a price target of C$175.00.
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Tamy Chen has given her Hold rating due to a combination of factors related to Canadian Tire’s operational expenditure outlook and market conditions. She expresses a more cautious stance on the company’s future operating expenses, which has led to a reduction in her estimates and a belief that the stock will likely remain stable until there is clearer insight into the benefits of the True North initiative or if the situation improves beyond current assumptions.
Despite management’s optimistic view on consumer trends within Canadian Tire’s banners, Chen remains neutral, as the current macroeconomic environment does not suggest a significant recovery in discretionary spending. The stock’s valuation, based on the Sum-of-the-Parts methodology, indicates it is trading within a historical range, and potential upside risks are not deemed compelling enough given the existing uncertainties around operating expenses.
According to TipRanks, Chen is a 3-star analyst with an average return of 3.1% and a 49.54% success rate. Chen covers the Consumer Defensive sector, focusing on stocks such as Empire Co Cl A NV, Loblaw Companies, and Saputo Inc..