Alimentation Couche-Tard os on watch after BMO Capital pulls its bull rating

[A Couche Tard convenience store at an Ultramar gas station in Montreal, Quebec, Canada.]
JHVEPhoto/iStock Editorial via Getty Images

Alimentation Couche-Tard (OTCPK:ANCTF [https://seekingalpha.com/symbol/ANCTF]) is on watch after BMO Capital Markets downgraded the Canadian multinational operator of convenience stores to a Market Perform rating after having it slotted at Outperform.

Analyst Tammy Chen said that after further analysis on Alimentation Couche-Tard's (OTCPK:ANCTF [https://seekingalpha.com/symbol/ANCTF]) stand-alone business, the firm forecasts only 1% to 2% annual organic EBIT growth in FY26 and FY27. The estimates assume a modest recovery in U.S. merchandise same-store sales and slight margin expansion, offset by elevated opex growth.

"As a result, we do not consider the stock's valuation compelling. We would need to see materially better U.S. merchandise SSS," warned Chen.

BMO clipped its price target on Alimentation Couche-Tard (OTCPK:ANCTF [https://seekingalpha.com/symbol/ANCTF]) to C$75 from C$76, which works out to 10.0X the firm's FY27 EBITDA estimate and 19.7X the FY27 EPS estimate.

Shares of Alimentation Couche-Tard (OTCPK:ANCTF [https://seekingalpha.com/symbol/ANCTF]) are down 8.0% on a year-to-date basis.

Of note, Seeking Alpha analyst Brant Munro [https://seekingalpha.com/article/4814313-alimentation-couche-tard-bye-bye-miss-seven-and-i] is bullish on the convenience store stock. "With a valuation discount to peers, a reinstated buyback program, and a proven history of executing in both favorable and distressed environments, ATD offers investors a compelling mix of resilience, opportunism, and capital discipline," he wrote on August 17.

MORE ON ALIMENTATION COUCHE-TARD INC.

* Alimentation Couche-Tard: Bye Bye Miss Seven & i [https://seekingalpha.com/article/4814313-alimentation-couche-tard-bye-bye-miss-seven-and-i]
* Alimentation Couche-Tard: French For World Class Compounder? [https://seekingalpha.com/article/4798803-alimentation-couche-tard-french-for-world-class-compounder]
* Alimentation Couche-Tard: Hold Until The Macro Situation Turns For The Better [https://seekingalpha.com/article/4798486-alimentation-couche-tard-stock-q4-hold-until-macro-situation-turns-better]
* Seven & i CEO: 7-Eleven U.S. IPO would help fund more aggressive growth [https://seekingalpha.com/news/4479481-seven-i-ceo-7-eleven-us-ipo-would-help-fund-more-aggressive-growth]
* Couche-Tard pulls $47B takeover bid for 7-11 parent [https://seekingalpha.com/news/4468158-couche-tard-pulls-47b-takeover-bid-for-7-11-parent]