Canadian Tire (CTC.A) AI Stock Analysis

• Market Cap: $8.89B
• Dividend Yield: 4.51%
• Average Volume (3M): 289.86K
• Price to Earnings (P/E): 11.7
• Beta (1Y): 0.64
• Revenue Growth: -0.13%
• EPS Growth: 13.73%
• Country: CA
• Employees: 13,973
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 3.78
• Shares Outstanding: 49,996,940
• 10 Day Avg. Volume: 300,543
• 30 Day Avg. Volume: 289,864
• PEG Ratio: 0.03
• Price to Book (P/B): 1.37
• Price to Sales (P/S): 0.51
• P/FCF Ratio: 5.65
• Enterprise Value/Market Cap: 1.95
• Enterprise Value/Revenue: 1.06
• Enterprise Value/Gross Profit: 3.18
• Enterprise Value/Ebitda: 10.45
• 1Y Price Target: $186.47
• Price Target Upside: 8.42% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: C$177.00 ▲(2.91% Upside)

Canadian Tire's overall stock score reflects strong earnings call performance and attractive valuation, offset by technical analysis indicating bearish momentum and financial performance concerns due to high leverage and declining profit margins. The company's strategic initiatives and dividend yield provide a positive outlook, but market momentum remains a challenge.

Positive Factors

Loyalty Program Expansion

The expansion of the Triangle Rewards program with major partners enhances customer engagement and loyalty, driving long-term sales growth.

AI Pricing Tool Success

The successful implementation of AI-driven pricing tools improves margin performance, showcasing innovation in operational efficiency.

Shareholder Returns

Significant share repurchase plans and dividend increases reflect strong capital allocation strategies, enhancing shareholder value.

Negative Factors

High Leverage

High leverage can limit financial flexibility and increase risk, potentially impacting long-term financial stability if not managed well.

Declining Net Profit Margins

Decreasing net profit margins indicate pressure on profitability, which could affect future earnings and investment capacity.

Volatile Cash Flow

Volatile cash flow growth can lead to uncertainty in funding operations and investments, impacting long-term business planning.

Canadian Tire Business Overview & Revenue Model

Company Description

Canadian Tire Corporation, Limited (CTC.A) is a Canada-based retail company that operates a diversified portfolio of businesses in the retail, financial services, and petroleum sectors. Founded in 1922, Canadian Tire is best known for its extensive range of automotive, hardware, sports, leisure, and home products, which are offered through its retail stores, including Canadian Tire stores, Mark's, and SportChek. The company also provides financial services through Canadian Tire Bank, offering credit cards and other financial products, and operates a network of gas stations across the country.

How the Company Makes Money

Canadian Tire generates revenue through multiple channels. The primary revenue streams include retail sales from its various store formats, which cater to automotive, home improvement, sports, and leisure markets. The company's extensive private label brands, such as Mastercraft and Motomaster, contribute significantly to margins. Additionally, Canadian Tire Bank provides financial services, including credit cards and personal loans, which generate interest income and fees. The company also earns revenue from its petroleum segment through the operation of gas stations. Partnerships with various suppliers and brands enhance product offerings and promotional activities, driving sales and customer loyalty. Furthermore, the Canadian Tire Money loyalty program incentivizes customer spending and retention, creating a cyclical boost to revenue.

Canadian Tire Financial Statement Overview

Summary

Canadian Tire shows stable financial performance with consistent revenue and operational efficiency. However, declining net profit margins and high leverage pose risks. Cash flow generation is improving, but volatility in free cash flow growth suggests potential risks.

Income Statement

Canadian Tire's income statement shows a stable revenue base with a slight growth in the TTM period. The gross profit margin remains healthy, although it has slightly decreased from previous years. Net profit margin has seen a decline, indicating some pressure on profitability. EBIT and EBITDA margins are stable, reflecting consistent operational efficiency. The revenue growth rate has been modest, suggesting a steady but slow growth trajectory.

Balance Sheet

The balance sheet indicates a moderate level of leverage with a debt-to-equity ratio above 1, which is typical for the retail industry but poses some risk. Return on equity has decreased over the years, reflecting reduced profitability on shareholders' equity. The equity ratio is stable, indicating a balanced asset structure, but the high debt levels could be a concern if not managed carefully.

Cash Flow

Cash flow analysis reveals a positive trend in free cash flow growth, although it has been volatile in previous years. The operating cash flow to net income ratio is relatively low, suggesting that cash generation from operations is not as strong as net income might suggest. The free cash flow to net income ratio is healthy, indicating that the company is generating sufficient cash relative to its net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	16.36B	16.36B	16.66B	17.81B	16.29B	14.87B
Gross Profit	5.46B	5.63B	5.70B	5.74B	5.48B	4.77B
EBITDA	1.66B	1.65B	1.64B	2.22B	2.23B	1.82B
Net Income	761.40M	887.70M	213.30M	1.04B	1.13B	751.80M
Balance Sheet
Total Assets	21.47B	22.24B	21.98B	22.10B	21.80B	20.38B
Cash, Cash Equivalents and Short-Term Investments	1.19B	575.90M	488.40M	490.10M	2.34B	1.93B
Total Debt	7.62B	7.91B	8.81B	7.72B	7.09B	7.16B
Total Liabilities	14.70B	15.15B	15.53B	15.06B	15.29B	14.54B
Stockholders Equity	5.83B	6.16B	5.55B	5.62B	5.12B	4.50B
Cash Flow
Free Cash Flow	1.11B	1.49B	772.80M	-146.00M	1.11B	2.14B
Operating Cash Flow	1.63B	2.06B	1.35B	466.50M	1.74B	2.44B
Investing Cash Flow	1.05B	-264.10M	-747.80M	-230.40M	-658.00M	-848.00M
Financing Cash Flow	-2.08B	-1.64B	-621.00M	-1.66B	-653.40M	-462.70M

Canadian Tire Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 171.99
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CTC.A, the sentiment is Positive. The current price of 171.99 is above the 20-day moving average (MA) of 167.87, above the 50-day MA of 167.05, and above the 200-day MA of 161.79, indicating a bullish trend. The MACD of -0.43 indicates Negative momentum. The RSI at 60.72 is Neutral, neither overbought nor oversold. The STOCH value of 62.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CTC.A.

Canadian Tire Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LNF	76 Outperform	C$2.02B	12.56	15.07%	2.91%	1.99%	31.36%
CTC.A	70 Outperform	$8.89B	11.75	13.16%	4.51%	-0.13%	13.73%
GBT	63 Neutral	C$420.15M	15.61	5.36%	2.77%	7.61%	1.71%
PET	63 Neutral	C$2.04B	22.16	106.59%	1.69%	5.09%	14.05%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Canadian Tire Corporate Events

Canadian Tire Reports Strong Q2 2025 Results

Canadian Tire Corporation, Limited is a prominent Canadian retail company that offers a wide range of products across various categories, including automotive, sports, and casual wear, while also operating a financial services division and a real estate investment trust.