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Canadian Tire Corp Ltd (TSE:CTC)
TSX:CTC
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Canadian Tire
(TSX:CTC)
61Neutral
Canadian Tire (CTC) vs. S&P 500 (SPY)
Market Cap
$8.53B
Dividend Yield3.34%
Average Volume (3M)319.00
Price to Earnings (P/E)13.4
Beta (1Y)0.78
Revenue Growth-1.79%
EPS Growth318.70%
CountryCA
Employees13,973
SectorConsumer Cyclical
Sector Strength50
IndustrySpecialty Retail
Share Statistics
EPS (TTM)15.96
Shares Outstanding3,423,366
10 Day Avg. Volume274
30 Day Avg. Volume319
Financial Highlights & Ratios
PEG Ratio0.04
Price to Book (P/B)N/A
Price to Sales (P/S)0.73
Price to Cash Flow (P/CF)3.40
P/FCF Ratio3.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$161.80Price Target Upside-24.57% Downside
Rating ConsensusHold
Number of Analyst Covering2
Canadian Tire Business Overview & Revenue Model
Company DescriptionCanadian Tire Corporation, Limited (CTC) is a diversified retail company headquartered in Toronto, Ontario, Canada. The company operates through various sectors, including retail, financial services, and real estate. Its core retail business encompasses a wide range of products such as automotive parts, tools, hardware, sports and leisure items, home products, and apparel. Canadian Tire also owns and operates several well-known retail brands, including Mark's, SportChek, and Party City Canada. Additionally, the company has a financial services division that offers credit card services, as well as insurance and retail banking products.
How the Company Makes MoneyCanadian Tire Corporation generates revenue through multiple channels, primarily from its retail operations, which include sales of automotive, hardware, sports, and home products across its various retail stores and online platforms. The company's financial services division contributes to its revenue by offering credit card and insurance products, earning interest and fees. Additionally, Canadian Tire benefits from its real estate investments by leasing properties to its retail operations and other tenants. Strategic partnerships and brand licensing agreements also play a role in enhancing CTC's revenue streams.
Canadian Tire Financial Statement Overview
Summary
Canadian Tire presents a stable financial position with improved profitability margins, though revenue decline remains a concern. High leverage is balanced by improved ROE. Significant growth in free cash flow highlights effective cash management.Income Statement
Canadian Tire has shown a mixed performance on its income statement. The Gross Profit Margin for 2024 is approximately 34.36%, indicating reasonable profitability in its operations. However, the Net Profit Margin has increased to 5.43% from 1.28% in the previous year, showing improved cost control or revenue management. Revenue has decreased by 1.8% in 2024 compared to 2023, indicating a challenge in maintaining growth. The absence of EBIT in 2024 is notable and suggests operational challenges.65
Positive
Balance Sheet
The company's balance sheet reflects a Debt-to-Equity Ratio of 1.28, which is relatively high and suggests significant leverage. However, the Return on Equity (ROE) improved to 14.42% in 2024 from 3.84% in 2023, indicating better profitability from shareholders' equity. The Equity Ratio of 27.67% suggests moderate reliance on equity financing, providing a fair balance between debt and equity.70
Positive
Cash Flow
Canadian Tire's cash flow statement shows a healthy Free Cash Flow to Net Income ratio of 1.61 in 2024, reflecting strong cash generation relative to net income. The Operating Cash Flow to Net Income ratio is 2.32, suggesting robust cash flow generation from operations. The Free Cash Flow has grown significantly by 108.25% from 2023, indicating improved cash management and operational efficiency.75
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 17.29B | 16.36B | 16.66B | 17.81B | 16.29B | 14.87B | Gross Profit |
| 5.92B | 5.62B | 5.38B | 6.10B | 5.84B | 5.08B | EBIT |
| 1.69B | 0.00 | 1.26B | 1.67B | 1.79B | 1.27B | EBITDA |
| 2.57B | 2.13B | 1.48B | 2.58B | 2.64B | 2.14B | Net Income Common Stockholders |
| 1.08B | 887.70M | 213.30M | 1.04B | 1.13B | 751.80M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 575.90M | 575.90M | 488.40M | 490.10M | 2.34B | 1.93B | Total Assets |
| 22.24B | 22.24B | 21.98B | 22.10B | 21.80B | 20.38B | Total Debt |
| 7.91B | 7.91B | 8.81B | 7.72B | 7.09B | 7.16B | Net Debt |
| 7.46B | 7.46B | 8.50B | 7.41B | 5.35B | 5.87B | Total Liabilities |
| 15.15B | 15.15B | 15.53B | 15.06B | 15.29B | 14.54B | Stockholders Equity |
| 6.16B | 6.16B | 5.55B | 5.62B | 5.12B | 4.50B |
| Cash Flow | Free Cash Flow | ||||
| 258.40M | 1.43B | 685.10M | -268.60M | 1.04B | 2.01B | Operating Cash Flow |
| 1.04B | 2.06B | 1.35B | 566.00M | 1.81B | 2.44B | Investing Cash Flow |
| -380.70M | -264.10M | -747.80M | -329.90M | -736.50M | -848.00M | Financing Cash Flow |
| -2.09B | -1.64B | -621.00M | -1.66B | -653.40M | -462.70M |
Canadian Tire Technical Analysis
Negative
214.50
Price Trends
224.73
Negative
220.58
Negative
220.93
Negative
Market Momentum
-3.69
Positive
45.90
Neutral
38.81
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CTC, the sentiment is Negative. The current price of 214.5 is below the 20-day moving average (MA) of 219.46, below the 50-day MA of 224.73, and below the 200-day MA of 220.93, indicating a bearish trend. The MACD of -3.69 indicates Positive momentum. The RSI at 45.90 is Neutral, neither overbought nor oversold. The STOCH value of 38.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CTC.
Canadian Tire Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $41.77B | 21.24 | 34.17% | 3.62% | 21.63% | -14.75% | |
75 Outperform | $42.04B | 38.60 | 142.11% | 0.25% | 8.24% | 17.99% | |
66 Neutral | C$8.53B | 9.35 | 15.17% | 4.92% | -1.79% | 318.70% | |
61 Neutral | $8.53B | 13.44 | 15.17% | 3.34% | -1.79% | 318.70% | |
61 Neutral | C$1.84B | 21.68 | 9.36% | 1.81% | 2.49% | -22.94% | |
59 Neutral | $12.26B | 11.12 | -0.55% | 3.78% | 1.42% | -20.63% | |
48 Neutral | $3.55B | 19.66 | -3.01% | 1.79% | -23.54% | -130.34% |
* Consumer Cyclical Sector Average
Performance Comparison
TSE:CTC
Canadian Tire
214.50
-24.98
-10.43%
TSE:DOL
Dollarama
151.68
49.72
48.77%
TSE:DOO
BRP
48.65
-48.39
-49.86%
TSE:QSR
Restaurant Brands International
92.41
-10.44
-10.15%
TSE:CTC.A
Canadian Tire
149.27
20.82
16.21%
TSE:RCH
Richelieu Hardware
33.30
-8.27
-19.89%
Canadian Tire Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -5.92% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive achievements, such as strong earnings performance and growth in key segments, alongside challenges like the potential impact of tariffs and modest sales growth. The company effectively managed margins and operational efficiencies, but external economic factors remain a concern.Highlights
Strong Earnings Performance
Achieved a normalized EPS of $4.07 in Q4, bringing annual EPS to $12.62, representing a significant improvement over 2023.
Triangle Rewards Program Growth
Triangle MasterCard spend at CTR increased by 2.4%, with loyalty sales growing 4% in Q4. The program shows strong customer engagement and loyalty.
Supply Chain Modernization Savings
DC transformations in Calgary and Montreal drove $20 million in savings in 2024, demonstrating efficiency improvements.
Helly Hansen Revenue Growth
Helly Hansen revenue was up 12% in Q4, with the U.S. accounting for half of the growth.
Mark's Store Expansion Success
New store investments at Mark's are showing considerable returns, contributing to half of Mark's overall retail sales growth in Q4.
Lowlights
Challenges with Tariffs and Economic Outlook
The looming threat of tariffs and potential negative impacts on Canadian GDP and employment trends pose significant risks.
Impact of Canada Post Strike
The Canada Post strike impacted flyer distribution, resulting in over 100 basis points of comps loss in the quarter.
Retail Sales and Comps Growth
Retail sales and comps excluding petroleum were up only slightly at more than 1%, indicating modest growth in a challenging demand environment.
Financial Services Write-Offs
The write-off rate at the bank increased to 7%, with the allowance rate slightly up to 12.4%, indicating rising credit risk.
Company Guidance
During the Canadian Tire Corporation's earnings call for the fourth quarter and full year 2024, several key metrics and strategic insights were shared. The company reported a normalized EPS of $4.07 for Q4, contributing to an annual EPS of $12.62, marking significant improvement from 2023. Retail sales and revenue both grew over 1% in Q4, with specific strength in automotive, Helly Hansen, and Mark's. The Triangle Rewards program was highlighted for driving customer engagement, with loyalty sales up 4% in Q4. Additionally, there was a 2.4% increase in Triangle MasterCard spend at Canadian Tire Retail. Concerns about potential tariffs and their impact on margins were discussed, with the company hedging 80% of 2025 USD requirements at favorable rates. Operational efficiency was emphasized, with $20 million in savings from distribution center transformations and reduced SG&A expenses. Looking forward, Canadian Tire is planning for modest growth and maintaining their margin target of 35.9%, while also preparing strategic responses to potential tariff impacts.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.