A Fresh Look at Couche-Tard (TSX:ATD) Valuation After Launching Iverson THC-Infused Beverages

Alimentation Couche-Tard (TSX:ATD) is entering the THC-infused beverage market, launching the Iverson craft soda. Created with cannabis brand Viola and wellness partners, the soda will be available at select Circle K locations in the Carolinas and Florida this quarter.

See our latest analysis for Alimentation Couche-Tard.

Despite the buzz around Couche-Tard’s launch of Iverson craft soda, recent share price returns have remained muted, with the stock down nearly 8% year-to-date. Still, its one-year total shareholder return sits in positive territory, and long-term investors have seen solid gains as momentum has built steadily over three and five-year periods.

If this latest move into THC beverages has you wondering what other bold companies are making waves, broaden your horizons and discover fast growing stocks with high insider ownership

With shares trading nearly 17% below analyst targets and long-term returns still robust, is Couche-Tard currently undervalued? Or are investors already anticipating its next leg of growth?

Most Popular Narrative: 14.7% Undervalued

With Alimentation Couche-Tard's narrative fair value pegged at CA$85.35, the last close of CA$72.80 leaves room between market price and growth story. This divergence prompts investors to question whether the market sees the same opportunities as the prevailing consensus narrative.

A sharper focus on higher-margin categories such as freshly prepared food, private label products, and exclusive partnerships (for example, the Guy Fieri collaboration) is accelerating gross profit margin improvements and reducing shrink, supporting sustainable earnings growth. Early investments and growth in alternative fuels and EV charging in Europe are positioning the company to capture future shifts in consumer mobility. This approach lays the foundation for long-term resilience and supports both revenue growth and margin stability as the energy transition progresses.

Read the complete narrative.

What is the secret behind this ambitious price target? The narrative puts a spotlight on steady growth, expanding margins, and a bold assumption about how investors will value future profits. Which of the underlying numbers are the real game changers? Uncover what is driving the consensus valuation and see the full picture for yourself.

Result: Fair Value of $85.35 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent declines in fuel volumes and mounting competition from discount retailers could create challenges for Couche-Tard's growth outlook and may weigh on future returns.

Find out about the key risks to this Alimentation Couche-Tard narrative.

Build Your Own Alimentation Couche-Tard Narrative

If you see the story differently or want to dig into the numbers yourself, you can craft your own view in just a few minutes, so why not Do it your way

A great starting point for your Alimentation Couche-Tard research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

Looking for More Smart Investment Ideas?

Opportunities are waiting for investors who keep an eye on the market’s next big themes. Spot trends before the crowd and strengthen your portfolio using these tailored screeners:

• Unlock growth potential by checking out these 3568 penny stocks with strong financials, which offer strong fundamentals and the chance for remarkable returns.
• Power up your income stream with these 17 dividend stocks with yields > 3%, featuring stocks paying yields over 3 percent, which can help build steady cash flow.
• Get ahead of tomorrow’s healthcare revolution and see these 33 healthcare AI stocks, which highlights breakthroughs in medical technology and AI-driven solutions.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com