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Research Alert: CFRA Maintains Sell Opinion On Shares Of Canadian Tire Corporation

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CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

We lower our 12-month target by CAD10 to CAD150, based on a 2027 P/E of 9.9x, a justified discount to CTC's five-year average forward P/E of 11.4x. We keep our adjusted EPS estimates at CAD14.80 for 2026 and CAD15.20 for 2027. CTC posted Q1 adjusted EPS of CAD2.02 vs. CAD2.00 (+1%), well ahead of the CAD1.81 consensus. The beat was primarily driven by better-than-expected margins, as revenue rose 3.3% to CAD3.57B (CAD30M ahead of consensus) despite a 1.0% drop in same-store sales (350 bps short of consensus). Gross margin expanded 90 bps to 35.4% (50 bps above consensus), reflecting pricing discipline and favorable mix. We maintain our Sell rating despite the better-than-expected quarter, as we believe the release confirmed many of our concerns regarding same-store sales growth and Canadian consumer spending. We continue to view CTC's risk/reward as unfavorable, highlighting the fact Canadian GDP growth of 1.7% in 2025 was the country's weakest since 2020 and viewing margin improvement as temporary.

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