Metro's shares look rich at current levels once long-term competitive pressures are accounted for.
We intend to increase our fair value estimate for Metro, Inc. to CAD 33 from CAD 31 to account for the time value of money and a slightly higher value of the firm’s 5.7% stake in Alimentation Couche-Tard. However, our near- and long-term forecasts remain unchanged, as does our no-moat rating for this Canadian grocer.With Metro’s shares trading at around CAD 47 per share, implying a forward price/2017 earnings ratio of 18 times and a dividend yield of less than 2%, we see shares as considerably ...
Metro is a food retailer and distributor that operates supermarkets, discount stores and drugstores in Canada. Co. operated 343 supermarkets under the Metro and Metro Plus banners, nine stores under the Adonis banner, and 213 discount stores under the Super C and Food Basics banners. Co. also acts as a distributor for medium-surface food stores and convenience stores. Co. also acts as franchisor and distributor for 181 franchised Brunet Plus, Brunet, Brunet Clinique, and Clini Plus drugstores, owned by independent pharmacists; and operated 73 drugstores under the Metro Pharmacy and Drug Basics banners. Co. also supplies non-franchised drugstores and various health centres.
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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.
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