EMP.A: Asta La Pasta: Q4 results and outlook broadly in-line with expectations

研报英文原文证据摘录

EMP.A: Asta La Pasta: Q4 results and outlook broadly in-line with expectations

Empire's position as the #2 food retailer a significant challenge. While Empire is tackling the challenge

in Canada with well-established market shares in Western head-on, the protracted timeline and absence of discount

and Atlantic Canada and Quebec, tempered by profitability presence in the increasingly discount-focused Quebec market

gap to publicly traded peers, limited exposure to pharmacy continue to give us pause.

and relative exposure to discount notwithstanding ongoing

Long-term EPS target 8-11%: After six years of Projects SunriseFreshCo conversions. EV/EBITDA slightly lower than the

and Horizon, EMP has shifted to focusing on the long-termaverage long-term multiple for the consumer sector in Canada

growth algorithm. The objective is to invest in the storeand a discount to the growth-oriented names in the space,

network and use digital and data to drive traffic and basket,consistent with Empire’s earnings growth outlook.

while delivering gross margin gains through efficiency and

Upside scenario effectiveness from procurement, productivity and efficiency

gains. LT EPS growth CAGR target of 8-11%.Under our $73 upside scenario, we make the assumption that

Sobeys generates food EBITDA margins 25 bps above our base Risks to rating and price targetcase and assign 8.5x EBITDA target multiple, consistent with

Greater-than-anticipated shift in consumer traffic to discountpeak EV/EBITDA valuation (comparable IFRS 16 basis) that was

banners where Sobeys is underpenetrated could result indiscounting depressed earnings, and consistent with industry

incremental investment in promotional activity to narrow thepeer.

pricing gap. As well, our forecasts and price target could