The Globe and Mail reports in its Saturday, June 29, edition that Desjardins analyst Keith Howlett kept his "hold" rating on Empire ($32.98) but boosted his share target to $31 from $30.50 after the company showed "good progress" in its latest earnings release. The Globe's Gillian Livingston writes in the Eye On Equities column that analysts on average target the Class A shares at $32. Mr. Howlett says in a note: "Adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] from the food business (excluding other income within the segment) increased by 5.8 per cent to $930.8-million in FY19. The increase of $50.5-million was significantly less than the Project Sunrise savings achieved during the year of $200-million. The company also benefited in FY19 from the full-year impact of the $100-million of cost savings achieved in FY18. We find it challenging to estimate the translation of projected future cost savings ($250-million) to EBITDA. Our EPS estimate remains $1.92 in FY20, and we are introducing our FY21 EPS estimate of $2.15. Our target price is based on 7.5 times FY20 adjusted EBITDA from the food segment, plus the value of interests held in Crombie REIT and other investments."
© 2019 Canjex Publishing Ltd. All rights reserved.