Metro Inc. (MRU) AI Stock Analysis

• Market Cap: C$22.01B
• Dividend Yield: 1.39%
• Average Volume (3M): 591.85K
• Price to Earnings (P/E): 23.3
• Beta (1Y): 0.43
• Revenue Growth: 1.59%
• EPS Growth: -1.98%
• Country: CA
• Employees: 97,870
• Sector: Consumer Defensive
• Sector Strength: 94
• Industry: Grocery Stores
• EPS (TTM): 4.30
• Shares Outstanding: 219,431,350
• 10 Day Avg. Volume: 673,193
• 30 Day Avg. Volume: 591,848
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.98
• Price to Cash Flow (P/CF): 31.80
• P/FCF Ratio: 51.90
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$100.00
• Price Target Upside: -0.31% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

Metro Inc. scores well overall, driven by strong financial performance and a positive earnings outlook, particularly in the food and pharmacy sectors. The technical indicators suggest a positive trend, although caution is advised due to the high P/E ratio indicating potential overvaluation. The increase in dividends further supports the stock's appeal. The main risks include inflationary pressures and operational cost increases.

Positive Factors

Earnings Outlook

The company's earnings outlook appears favourable as it exited a significant DC project.

Operational Efficiency

Key benefits include labour savings, improved productivity and efficiency over the longer term as volume grows, less reliance on direct store delivery, and sales uplift from improved on-shelf availability.

Sales Performance

Very strong food SSS of +2.4% vs. BMO's +0.2%.

Negative Factors

Consumer Behavior

MRU noted traffic is up y/y across its banners, but basket is slightly down.

Trade/Tariff Concerns

There is concern about the possibility of trade/tariff headwinds with the U.S., which could negatively impact Canada's economic growth.

Valuation

Premium valuation leaves little upside without deteriorating macro conditions.

Metro Inc. Business Overview & Revenue Model

Company Description

Metro Inc. operates as a retailer, franchisor, distributor, and manufacturer in the food and pharmaceutical sectors in Canada. It operates supermarkets and discount stores that provide fresh and grocery products, baked goods, prepared foods, meats, dairy products, fruits and vegetables, frozen foods, bakery products, and pastries, as well as Mediterranean and Middle Eastern products. As of September 25, 2021, the company operated a network of approximately 963 food stores under various banners, including Metro, Metro Plus, Super C, and Food Basics, Adonis, and Premiere Moisson as well as approximately 649 drugstores primarily under the Jean Coutu, Brunet, Metro Pharmacy, and Food Basics Pharmacy banners. It also manufactures generic drugs; and provides online grocery shopping services. Metro Inc. was founded in 1947 and is headquartered in Montréal, Canada.

How the Company Makes Money

Metro Inc. generates revenue through multiple streams primarily centered around its grocery and pharmacy operations. The company's core revenue comes from the sale of food and related products through its extensive network of supermarkets and discount stores. Additionally, Metro earns significant income from its pharmacy segment, which includes the sale of prescription drugs, over-the-counter medications, and health and beauty products. The company also benefits from private label brands, which offer higher margins compared to national brands. Strategic partnerships with suppliers and a focus on operational efficiency further enhance its profitability. Metro's earnings are also supported by its real estate operations, as it owns and leases retail properties, providing an additional revenue stream.

Metro Inc. Financial Statement Overview

Summary

Metro Inc. presents a strong financial profile characterized by consistent revenue growth, solid profitability, and efficient cash flow management. The company's moderate leverage and effective equity utilization contribute to its financial stability. While the company shows strengths in profitability and cash generation, maintaining these metrics as market conditions evolve will be key to sustained success.

Income Statement

Metro Inc. demonstrates strong profitability with a consistent gross profit margin of approximately 18-19% and a net profit margin of around 4.5% for the TTM. Revenue growth is positive, with a 2.5% increase from the previous year, indicating steady growth in sales. The EBIT and EBITDA margins also reflect healthy operational efficiency, with an EBIT margin of 4.3% and an EBITDA margin of 9.3% for the TTM.

Balance Sheet

The balance sheet reflects a solid financial structure with a debt-to-equity ratio of 0.62, indicating moderate leverage. Return on Equity stands at 13.5% for the TTM, showcasing effective utilization of shareholder funds. The equity ratio is 49.2%, implying a balanced approach to financing with a good portion of assets funded by equity.

Cash Flow

Metro's cash flow is robust with a free cash flow growth rate of 19.9% for the TTM, suggesting strong cash generation capability. The operating cash flow to net income ratio is 1.68, indicating efficient conversion of net income to cash. The free cash flow to net income ratio is also favorable at 1.10, highlighting strong cash flow relative to earnings.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
21.36B	21.22B	20.72B	18.89B	18.28B	18.00B
	Gross Profit
3.91B	4.18B	4.08B	3.78B	3.65B	3.58B
	EBIT
1.27B	1.41B	1.97B	1.33B	1.27B	1.24B
	EBITDA
1.99B	1.99B	2.00B	1.79B	1.74B	1.69B
	Net Income Common Stockholders
960.60M	928.80M	1.01B	846.10M	823.00M	795.20M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
0.00	29.40M	29.50M	13.40M	445.80M	441.50M
	Total Assets
14.47B	14.14B	13.87B	13.40B	13.59B	13.42B
	Total Debt
4.43B	4.31B	4.32B	4.12B	4.56B	4.70B
	Net Debt
4.43B	4.28B	4.29B	4.11B	4.12B	4.26B
	Total Liabilities
7.34B	7.10B	7.05B	6.78B	7.18B	7.27B
	Stockholders Equity
7.12B	7.02B	6.80B	6.60B	6.40B	6.14B
Cash Flow		Free Cash Flow
1.06B	1.10B	883.60M	840.30M	984.00M	963.40M
	Operating Cash Flow
1.61B	1.68B	1.56B	1.46B	1.58B	1.47B
	Investing Cash Flow
-434.70M	-456.40M	-572.50M	-477.80M	-471.60M	-444.10M
	Financing Cash Flow
-1.23B	-1.22B	-974.90M	-1.42B	-1.11B	-861.90M

Metro Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 100.31
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MRU, the sentiment is Positive. The current price of 100.31 is above the 20-day moving average (MA) of 97.56, above the 50-day MA of 95.19, and above the 200-day MA of 87.61, indicating a bullish trend. The MACD of 1.12 indicates Positive momentum. The RSI at 63.50 is Neutral, neither overbought nor oversold. The STOCH value of 44.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:MRU.

Metro Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MRU	80 Outperform	C$22.01B	23.34	13.78%	1.39%	1.59%	-1.98%
NWC	80 Outperform	C$2.51B	18.23	18.85%	3.02%	4.23%	6.08%
L	78 Outperform	$61.66B	29.06	19.33%	1.00%	2.49%	7.16%
EMP.A	78 Outperform	C$11.20B	17.05	12.64%	1.69%	1.05%	-6.94%
ATD	77 Outperform	C$67.23B	18.88	18.66%	1.04%	11.62%	-8.08%
DOL	76 Outperform	$44.81B	38.73	152.86%	0.23%	9.30%	16.85%
Sector *	63 Neutral	$21.18B	14.33	-16.36%	3.22%	1.30%	4.55%

Metro Inc. Corporate Events

METRO Inc. to Announce Q2 2025 Financial Results

METRO Inc. announced that it will release its second quarter fiscal 2025 results on April 16, 2025, followed by a conference call for investors and financial analysts. This announcement is significant for stakeholders as it provides insights into the company’s financial performance and strategic direction, potentially impacting its market positioning and investor confidence.

Metro Inc. Reports Strong Q1 2025 Results with Growth Across Key Sectors

Metro Inc. reported strong results for the first quarter of Fiscal 2025, with sales increasing by 2.9% to $5,117.1 million and net earnings up 13.6% to $259.5 million. This performance was supported by solid revenue growth, successful marketing initiatives, and a strategic focus on cost management. The company’s food and pharmacy sectors both showed growth, with notable increases in online food sales and pharmacy same-store sales. The positive results are expected to create long-term shareholder value and strengthen Metro’s market positioning.