Alimentation Couche-Tard Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Alimentation Couche-Tard Inc. (TSE:ATD) came out with its first-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at US$16b, statutory earnings beat expectations by a notable 12%, coming in at US$0.86 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Alimentation Couche-Tard

Following last week's earnings report, Alimentation Couche-Tard's nine analysts are forecasting 2024 revenues to be US$69.1b, approximately in line with the last 12 months. Statutory earnings per share are expected to dip 2.7% to US$3.04 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$69.4b and earnings per share (EPS) of US$2.96 in 2024. So the consensus seems to have become somewhat more optimistic on Alimentation Couche-Tard's earnings potential following these results.

The consensus price target was unchanged at CA$79.92, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Alimentation Couche-Tard, with the most bullish analyst valuing it at CA$86.79 and the most bearish at CA$73.13 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Alimentation Couche-Tard is an easy business to forecast or the the analysts are all using similar assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Alimentation Couche-Tard's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 0.5% growth on an annualised basis. This is compared to a historical growth rate of 4.5% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 2.3% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Alimentation Couche-Tard.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Alimentation Couche-Tard's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Alimentation Couche-Tard's revenue is expected to perform worse than the wider industry. The consensus price target held steady at CA$79.92, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Alimentation Couche-Tard. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Alimentation Couche-Tard analysts - going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Alimentation Couche-Tard that you should be aware of.

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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.