The Globe and Mail reports in its Wednesday edition that Desjardins Securities analyst Chris Li thinks fundamentals for Canadian grocery companies "remain supportive of current valuation, with inflation remaining above the historical average, rational competition and recession-resilient pharmacy/front store." The Globe's David Leeder writes in the Eye On Equities column that Mr. Li expects Loblaw to benefit most from these trends but says he prefers George Weston because he views "the current holdco discount as attractive." He expects sector rotation and slowing inflation will limit valuation expansion, with share price appreciation mainly driven by earnings-per-share growth. Mr. Li believes the risk/reward is favourable for long-term investors in Canadian Tire, Gildan Activewear, Premium Brands Holdings and Saputo "as these are strong companies with solid balance sheets." He says in a note: "We estimate these stocks offer more than 20-per-cent average potential total return vs 10-per-cent downside. Using our downside analysis as a guide, we believe market volatility will create attractive buying opportunities. We highlight PBH as it trades close to trough valuation and has the most torque to lower interest rates."