Report
Dan Wasiolek
EUR 100.00 For Business Accounts Only

Loblaw's Digital Investments Continue but Not Enough to Generate a Competitive Advantage

We see little reason to materially change our five-year outlook of low-single-digit annual sales growth and gross margins that average near 29% (versus 30.3% in 2018) for no-moat Loblaw, after the company reported first-quarter revenue growth of 3% with total retail gross margins of 29.6% (down 30 basis points). Trading just over 14 times 2019 adjusted earnings, we see shares as overvalued to our existing CAD 57 per share valuation.
In our view, the competitive environment remains intense for Lo...
Underlying
Loblaw Companies Limited

Loblaw is a Canadian food distributor and provider of general merchandise, drugstore and financial products and services. Traditional food offerings remain at the core of Co.'s business. Co. operates conventional, superstore, and hard discount stores. Co. offers products through control label program with famous brands including President's Choice, no name and Joe Fresh Style. Co. also offers President's Choice Financial services and offers the PC points loyalty program.

Provider
Morningstar
Morningstar

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.

Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.

We have operations in 27 countries.

Analysts
Dan Wasiolek

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