Weather Drags, But Dealer Buys Render Stores Ready to Serve as Spring Breaks

Research evidence excerpt

Weather Drags, But Dealer Buys Render Stores Ready to Serve as Spring Breaks

Canadian Tire Corporation, Ltd (CTC/A CN)

Equity Research

May 14, 2026

The Long View: Canadian Tire

Investment Thesis Risk/Reward - 12 Month View

• Scale, brand awareness, and first-party data are competitive advantages vs.

Upside : Downside

small chains and independents which have >50% of market share 220 2.17 : 1

216 (+23%)

• Thoughtful actions to drive consumer wallet share, including loyalty 210

program enhancements and ongoing store refreshes 200

• Market share gains tempered by U.S. retailers (AMZN, WMT, TJX) and 190

international retailers (IKEA, JD Sports) ramping investments in Canada 180 179 (+2%)

• Canadian-based retailers (PET, DOL, RONA) also seeking to improve their 170

perceived value proposition among consumers 160 156 (-11%)

• Heavy Retail and Bank SG&A spend cycle 150

2025 2026 +12 mo.

Base Case, Upside Scenario, Downside Scenario,

C$179, +2% C$216, +23% C$156, -11%

• Geopolitical tensions stabilize • Geopolitical tensions dissipate • Geopolitical tensions rise

• Discretionary sales recover • Canadian consumer backdrop accelerates • Canadian consumer backdrop deteriorates

• Strategic initiatives enough to offset • Discretionary sales accelerate beyond current • Performance differential between essential &

competitive pressure and maintain share expectations discretionary categories widen

• '25 store refreshes spur uptick in AUVs • Strategic initiatives offset competitive pressure • Intensifying competitive landscape offsets

• Gradual increase in digital penetration over time and drive share gains benefit from strategic initiatives

• Gradual increase in owned brand penetration • Store refreshes show outsized AUV lift • Store refreshes show no lift to store economics