Canadian Tire Earnings: Positive Top-Line Inflection and Margin Improvement Underpin Solid Quarter

We plan to raise our CAD 160 fair value estimate on no-moat Canadian Tire by a low- to- mid-single-digit percentage following its solid fiscal 2024 fourth-quarter earnings release, primarily due to the time value of money. The firm’s results did not significantly differ from our expectations, and we do not plan to materially alter our long-term forecast, which calls for low-single-digit top-line growth and a midcycle operating margin around 9%. Shares declined about 5% following the earnings release, but the stock continues to trade in a range that we’d consider to be fairly valued.