Quarterly Performance of Rona, CGI and Loblaw

Quarterly Performance of Rona CGI and Loblaw

After a week of festive moods reigning on Wall Street, contributed to by the strength of the labor market, the victory of the Republicans in Congress and good corporate results, future sessions will allow investors to take stock as the economic calendar looks rather light.

Over the past five days, the S & P 500 gained 0.7% and the Dow Jones 1.1%, while the Nasdaq remained stable. The S&P / TSX Toronto Stock Exchange has taken its share up 0.5%.

At the front of the results there are those of Wal-Mart Stores and Cisco Systems are among the main targets to focus on in US. Many leading companies in Canada share their most recent figures, including retailers Rona and Loblaws, as well as the financial heavyweight Power Corp Montreal, CAE and CGI Group.

Rona: better, but…

Several factors should be allowed Rona to improve its financial performance in the third quarter, but the retailer Boucherville must contend with significant weakness in some sectors, including the property in Quebec.

The company headed by Robert Sawyer unveiled its third quarter results on November 11.

Vishal Shreedhar of National Bank Financial, provides that the chain will present earnings per share of $0.32, which is below the average of its peers, which is $0.34 per share. Last year, Rona had a profit of $0.25 per share.

Financial analysts note that the Quebec real estate market remains slow. However, the company should have benefited from the increase in the price of lumber and the new impetus given to the sign Reno-Depot.

Analysts surveyed by Bloomberg have it that sales are expected to be $1,15 billion for the last three months. At this time last year, Rona had achieved revenues of $1,17 billion.

The comparable store sales, or branches open for at least a year, rose 0.7% in the quarter compared with a decrease of 2.3% of sales in the same period a year ago, as anticipated by Mr. Shreedhar.

Same-store sales are a key measure of retail performance.

Mr. Shreedhar also stressed that Rona probably repurchased 2.6 million shares for $35,5 million in the third quarter. The analyst maintains its recommendation to “market performance” for the stock and its target of $14.

Loblaw: a more favorable context

The largest grocery chain in Canada, Loblaw, should have known better third quarter results than last year, when the competition had forced to lower its financial forecast for the year.

The company run by Galon Weston will release its third quarter results on November 12.

The context has changed dramatically over the past year. The competition is less intense and food inflation is stronger. In addition, more sophisticated supply of fresh produce should have benefited the chain. And to this is added the integration of the results of the most important sign of Canadian pharmacies nationwide, Shoppers Drug Mart / Pharmaprix.

Vishal Shreedhar of National Bank Financial expects earnings of $0.87 per share. On average, analysts surveyed by Bloomberg designed a profit of $0.86 per share. Last year, Loblaw had cleared adjusted earnings of $0.78 per share.

The Financial Analyst provides that same-store sales, or institutions in activities for at least a year rose 2.5% compared with 0.04% in the same quarter a year earlier.

Sales are expected to make a total of $13.6 billion, according to the average forecast of analysts.

The Loblaw action has climbed 34% since the beginning of the year, while its results and the business climate have improved. Mr. Shreedhar increased its target for the title Loblaw $61 a fortnight ago. She was previously at $58. Morningstar is less generous than the independent firm draws establishes fair value as $47.

CGI: alternative investment

The companies in the IT sector have suffered from poor performance of the flagship company IBM (NY, IBM) last quarter, but CGI Group is an interesting idea of alternative investment for the year 2015, believes Steven Li, an analyst at Raymond James.

The company headed by Michael E. Roach will unveil its third quarter results on November 13.

Steven Li has recently raised its forecast for earnings per share for the CGI Group to $0.73, or $0.03 more than before. All the analysts target a profit of $0.72 per share.

According to Raymond James analyst, CGI is expected to post revenues of $2,57G, which is fairly consistent with the average forecast of $2,568 billion of analysts surveyed by Bloomberg.

Analysts closely monitor the cash that the company emerges from its activities. Raymond James analyst expects the company to achieved $358 million in cash flows. This liquidity allows CGI to repay loans, repurchase shares and make acquisitions.

Will the company make another major acquisition in 2015? Certainly, the company has a sound financial footing now that it has repaid much of the debt as a result of the purchase of Logica. Li calculates that approximately $1,3 billion of capital available for further growth investing.

The analyst maintains his outperformance recommendation and the target of $46. The security is valued at 12.6 times earnings for 2015.

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