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Metro Price Target Lowered to $97 at Desjardins

-- Desjardins lowered its price target on Metro Inc. (MRU.TO) to $97 from $99.

Analyst Chris Li maintained a Hold rating on shares of the Canadian supermarket chain following its quarterly results on Wednesday.

"Despite solid results with EPS growth returning to MRU's 8-10% target, the stock underperformed," Li said in a note to clients. "We attribute this mainly to concerns around slowing food SSSG (rising competition and moderating consumption) and limited earnings visibility from the produce DC strike."

"These are masking MRU's success in navigating through a challenging environment," the analyst said.

"Given MRU's large valuation discount to Loblaw Cos. Ltd. (L.TO) (17x vs 23x forward P/E), we expect improving earnings visibility to be a key driver of valuation improvement."

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