Canadian Tire Corporation CTC.A Q4 2009 Preview; Moderating Estimates/Tweaking Target

admin — Mon, 08 Feb 2010 20:31:27 +0000

Canadian Tire Corporation (CTC.A): $54.26 – Q4/09 Preview; Moderating Estimates/Tweaking Target
Sector Perform, Average Risk, Price Target: $63.00 (prev. $64.00)
CTC will report Q4/09 results this Thursday, February 11, and RBC CM expects a soft quarter, with EPS down 15% to $1.36. At this time, the “consensus” of forecasts for the quarter is $1.47, with a range of $1.28 -$1.54. RBC CM believes Q4 same store sales will be challenged by the combination of balmy weather since about mid-quarter along with the boost to sales in Q4/08 from the adoption of legislation mandating winter tires in the province of Quebec. In Financial Services, momentum over the next three quarters will be challenged by the lagging nature of return on receivables. Looking ahead to 2010, RBC CM expects it to be a challenging year for CTFS, due to: i) write-offs and bankruptcies are expected to continue to rise through mid-year along with unemployment trends; ii) costs associated with the new credit card legislation, and iii) costs associated with a planned re-launch of the cards to include chip technology.

TSX Commentary » Canadian Tire Corporation

Canadian Tire Corporation CTC.A Q4 2009 Preview; Moderating Estimates/Tweaking Target