Desjardins Analyst Maintains Buy Rating on Alimentation Couche-Tard

Convenience store operator Alimentation Couche-Tard is scheduled to release its financial results for the second quarter of fiscal 2027 on November 24 after the market close. Ahead of the announcement, financial analysts are examining the retailer's current market position and potential trajectory.

Chris Li, an analyst at Desjardins Securities, remains confident in the company's outlook and continues to recommend a buy rating for the stock with a one-year target price of $101. Li anticipates that the upcoming quarterly report will display trends comparable to those observed during the first quarter.

During the previous period, convenience stores faced ongoing economic headwinds alongside fluctuating consumer demand for gasoline driven by higher prices. However, the company successfully offset these challenges through the robust execution of its strategic Core+More framework, which was originally unveiled in February.

For the second quarter, the Desjardins analyst projects a 1.8 percent increase in U.S. comparable merchandise sales, improving slightly from 1.7 percent in the preceding quarter. Although this growth rate trails the typical 2 percent to 3 percent range, performance remains solid across core categories such as food and energy drinks.

Li also highlighted that Couche-Tard continues to outperform competitors like 7-Eleven, which reported zero growth in comparable sales during the same timeframe. While elevated gasoline prices are expected to continue weighing on consumer demand, the analyst believes this effect will be mitigated by a healthy fuel margin of approximately 48.5 cents per gallon.

In the Canadian market, the Desjardins analyst forecasts a 0.5 percent increase in sales accompanied by a margin reduction of roughly 80 basis points compared to the previous year. Overall, the firm's strategic execution continues to provide stability amid broader retail sector challenges.