This summary was created by AI, based on 3 opinions in the last 12 months.
The North West Company (NWC-T) has reported strong financial results for the quarter, beating estimates for EPS, sales, and EBITDA. The company saw a significant rise in sales and profit, and its outlook for the future is relatively positive. Despite recent challenges related to inflation and interest rates, experts believe that NWC remains a solid investment with a stable long-term outlook. The company operates in remote northern locations, giving it a natural economic moat with limited competition, and has demonstrated pricing power and profitability. Overall, analysts view NWC as a defensive consumer staples name with attractive valuation and a healthy dividend yield.
The quarter is a big relief for worried investors. EPS of 83c beat estimates of 68c. Sales of $618M beat estimates by 2%. EBITDA of $83.3M beat estimates of $73.1M. Sales rose 6.8% with comp. sales up 4.7%. Profit rose 17%. EBITDA rose 15% year over year. TD has already raised its target on the news. The dividend was increased 2.6%. Expenses were kept in line and it was a solid quarter. The outlook sounded relatively positive as well. The write off of the Fox Lake store due to fire was embedded in these results and this should not have a material impact going forward.
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NWC was under pressure recently after weak earnings and the stock is now trading at 11.4x times' Forward P/E. In 1Q - 2024, NWC’s revenue grew 7.5% to $594M, beating estimates of $589M and EPS was $0.54 missing estimates of $0.59. Based on consensus estimates, sales are expected to grow by 4% to $2.45B, while EPS is expected to be $2.52 in 2024 and $2.72 in 2025 (note January year end). Recent earnings were under pressure due to high inflation and interest rates, which were largely expected. NWC might have some exposure to a slowing consumer, but it is also a defensive consumer staples name.
We like the company in general and think the long-term thesis on it as a consumer staple name is unchanged. We would be okay to slowly accumulate, especially at this valuation, which we think is quite attractive compared both to peers and historical averages. The current quarter may have been impacted by fires, but the company is supposed to announce if there are 'material' concerns, and it has not.
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Retailer mainly in remote northern locations, a natural economic moat. Competition is limited. Pricing power, which leads to profitability. ROE better than TSX average. Missed earnings due to inflation, so valuation is attractive. Yield is 4.77%.
(Analysts’ price target is $38.25)Average daily volumes are only 90,000 shares, but NWC pays a hefty dividend yield of 4.22% (huge among the grocers) and safe based on a 21.88% payout ratio. NWC also offers a super-low beta of 0.62. It is safe and defensive. Performance is also consistent. The company has beaten or met its last four quarters. Its PE of 14.34x is in-line with this sector (with Empire trading at 12.87x and Metro close to 20x). Read 3 Deep Value Stocks to Buy Now for our full analysis.
Trades at 13x PE. Offers a bigger yield of 4.5% than the major grocery stocks.
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The company reports on Thursday. Likes the company somewhat. It’s cheap at 13x earnings and offers a nice, secure dividend. $591M in sales is expected with a $0.73 per share income. Unlock Premium - Try 5i Free
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. They beat EPS estimates by 4 cents, at 70 cents. EBITDA beat estimates by 20% at $83.6M. Same store sales rose. They continue to benefit from the pandemic and have controlled costs well. Unlock Premium - Try 5i Free
North West Company is a Canadian stock, trading under the symbol NWC-T on the Toronto Stock Exchange (NWC-CT). It is usually referred to as TSX:NWC or NWC-T
In the last year, 1 stock analyst published opinions about NWC-T. 1 analyst recommended to BUY the stock. 0 analysts recommended to SELL the stock. The latest stock analyst recommendation is . Read the latest stock experts' ratings for North West Company.
North West Company was recommended as a Top Pick by on . Read the latest stock experts ratings for North West Company.
Earnings reports or recent company news can cause the stock price to drop. Read stock experts’ recommendations for help on deciding if you should buy, sell or hold the stock.
1 stock analyst on Stockchase covered North West Company In the last year. It is a trending stock that is worth watching.
On 2024-11-01, North West Company (NWC-T) stock closed at a price of $53.05.
NWC slightly missed EPS forecasts of 60c coming in at 57c. Revenue marginally beat estimates of $617.16M coming in at $617.5M displaying growth of 4% year-over-year. Same-store-sales growth was 3.8%. Adjusted profit increased 13% to $29.4M, from $26.1M last year due to due to gross profit and expense factors. It was a solid quarter for NWC displaying signicant EPS growth year-over-year that was largely in line with expectations. Over the last four quarters, sales growth was declining and margins were declining, but the most recent quarter shook off these issues. Being a consumer staples company, the bull case relies on strength of the consumer. If the company's target consumer becomes stronger paired with NWC opening more stores in target markets, it could see solid top and bottom line growth. On the flip side, the bear case is more conservative due to the defensive nature of the industry however, the stock has seen some big dips in March 2020 and June 2023 which are possible if sales/profitability meaningfully comes under pressure. We think it is a relatively safe company that trades at an attractive valuation, and pays a nice yield.
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