# Loblaw Companies (L) Sector: Food and drug retail | Field | Value | |---|---| | Price | CA$68.99 | | Intrinsic value source | Analysts | | Data as of | 2026-11-11 | | Next earnings | 2026-11-19 (confirmed) | Analysts: Bullish Picks: Research only Discount category: Far above intrinsic value ## In short Investors pay a premium for the steady earnings growth and buybacks of Loblaw, and only several years of EPS growth near its long-term target can earn it. ## Themes and gap - Themes: Regulation and courts (regulation-legal), Weak consumer (weak-consumer) - Gap type: Slow (slow) - Why: Only several years of adjusted EPS growth near the target of 8% to 10% a year can earn the premium. ## About Loblaw Companies (Loblaw) is the largest food and pharmacy retailer in Canada. It operates supermarkets, hard discount stores and drug stores under banners such as Loblaws, Real Canadian Superstore, No Frills, Maxi, T&T and Shoppers Drug Mart, and it sells its own brands President's Choice and no name. Its PC Optimum loyalty program had more than 18 million active members in 2025. At June 20, 2026, Loblaw had 2,523 stores and 73.8 million square feet of retail space, and in Q2 2026 it opened its first T&T store in California. Loblaw also has businesses in supply chain services, retail media and data, and Lifemark health clinics. On July 1, 2026, it sold President's Choice Bank to EQB Inc. and now owns about 19.9% of EQB. In 2025, a year with one extra week, revenue was C$63,903 million. George Weston Limited owns about 52.6% of the common shares. The shares trade on the Toronto Stock Exchange. The head office is in Brampton, Ontario. Per Bank is President and Chief Executive Officer. ## Thesis Loblaw trades above its intrinsic value because investors pay for its steady earnings growth, its strong position in Canadian food and pharmacy retail and its large share buybacks. Adjusted EPS from continuing operations rose 8.8% in the first half of 2026, and Loblaw bought back 19.0 million shares for C$1,200 million in that time. At its Investor Day on September 9, 2026, Loblaw set a long-term target of adjusted EPS growth of about 8% to 10% a year. For the shares to earn this price, three things must be true. Discount banners and Shoppers Drug Mart must keep growing their sales, although Food Retail same-store sales grew only 1.6% in Q2 2026. Retail earnings must grow faster than sales, as the 2026 outlook says. The new growth businesses and the share of EQB income must add to earnings, so that their contribution doubles by 2031. The Q3 2026 report on November 19, 2026 is the next test. Slower food sales, more price competition or new rules on grocery prices can make the premium hard to keep. ## Checkpoints - Jul 30, 2026: Q2 2026 results and the 2026 outlook. Status: Passed. Watch: Adjusted EPS growth of 8% or more and a kept outlook pass; a lower outlook fails. Outcome: Adjusted EPS rose 11.9% to C$0.66, and Loblaw kept its 2026 outlook. - Nov 19, 2026: Q3 2026 results, the first quarter without President's Choice Bank. Status: Pending. Watch: Adjusted EPS growth from continuing operations of 8% or more and positive Food Retail same-store sales pass; lower adjusted EPS fails. - Feb 2027 (estimate): 2026 results and the 2027 outlook. Status: Pending. Watch: 2026 adjusted EPS growth in the high single digits and a 2027 outlook in line with the 8% to 10% framework pass; a lower outlook fails. ## Balance sheet - Cash: CA$1.0B - Debt: CA$5.9B - Net debt: CA$4.9B - Undrawn credit line: CA$1.5B, to March 2030 - Ratings: S&P BBB+ (stable outlook) Loblaw funds itself with cash flow, debentures and leases. At June 20, 2026, cash and cash equivalents were C$998 million and short-term investments C$14 million. Long-term debt was C$5,912 million, mainly debentures of C$5,202 million, and none of it was due within one year. Lease liabilities were C$10,666 million. Total debt excluding leases, with certain other liabilities, was C$6,242 million. Debt to rolling year adjusted EBITDA, as Loblaw measures it, was 2.3 times. The committed credit facility of C$1.5 billion, which ends on March 27, 2030, was undrawn. S&P rates the issuer BBB+ with a stable outlook. In the first half of 2026, Loblaw bought back 19.0 million shares for C$1,200 million, and 1,157,499,810 shares were outstanding at June 20, 2026. The sale of President's Choice Bank on July 1, 2026 gave C$235 million in cash and 7.2 million EQB shares. The quarterly dividend is C$0.155183 per share. As of 2026-06-20. Sources: - https://dis-prod.assetful.loblaw.ca/content/dam/loblaw-companies-limited/creative-assets/loblaw-ca/investor-relations-reports/annual/2026/LCL_Q2%202026_RTS.pdf - https://dis-prod.assetful.loblaw.ca/content/dam/loblaw-companies-limited/creative-assets/loblaw-ca/investor-relations-reports/annual/2025/LCL_2025%20Annual%20Report.pdf ## Dividends - Dividend yield: 0.9% (last 12 months, at the current price) - Paid per share, last 12 months: CA$0.592 (4 payments) - Current annual rate: CA$0.62 (CA$0.155 x 4 a year) - Latest ex-dividend date: 2026-09-15, CA$0.155 per share - Growth from 2020 to 2025: 11.5% a year - Growth from 2015 to 2025: 10.7% a year Dividends per share by year: 2016: CA$0.207, 2017: CA$0.215, 2018: CA$0.2466, 2019: CA$0.31, 2020: CA$0.32, 2021: CA$0.35, 2022: CA$0.395, 2023: CA$0.4358, 2024: CA$0.4963, 2025: CA$0.5513. Source: company filings and market data, read on 2026-11-11. ## Recent events - 2026-09-09: At its Investor Day, Loblaw set a long-term financial framework that targets adjusted EPS growth of about 8% to 10% a year. It expects supply chain services, retail media and data, Lifemark, the T&T expansion in the United States and the EQB income to give about 10% of operating income in 2026, and their contribution to double by 2031. - 2026-07-30: Loblaw reported Q2 2026 results. Retail sales rose 4.1% to C$15,046 million, with Food Retail same-store sales growth of 1.6% and Drug Retail same-store sales growth of 4.6%. Adjusted EPS rose 11.9% to C$0.66. Loblaw bought back 8.8 million shares for C$552 million in the quarter and kept its 2026 outlook of adjusted EPS growth in the high single digits. - 2026-07-01: Loblaw completed the sale of President's Choice Bank and related businesses to EQB Inc. for C$1,234 million, which included 7.2 million EQB shares worth C$963 million and C$235 million in cash. Loblaw now owns about 19.9% of EQB and expects a gain of about C$375 million before tax in Q3 2026. - 2026-05-06: Loblaw reported Q1 2026 results. Net earnings available to common shareholders rose 18.1% to C$594 million, or C$0.50 per share, and adjusted EPS rose 10.6% to C$0.52. It opened 5 hard discount stores and 8 drug stores. ## Risks - Medium: Food retail in Canada is very competitive. Other grocers, discount stores and online sellers compete on price, and more sales in discount stores can lower margins. - Medium: Changes to laws and rules, for example on prices, supplier terms or competition, can limit margins. - Medium: Drug Retail depends on prescription drug prices that governments set. A reduction of generic drug prices or of professional allowances can lower earnings. - Low: Loblaw now owns about 19.9% of EQB. Its share of EQB income depends on the results of a bank, which can change with credit losses and interest rates. - Low: George Weston Limited owns about 52.6% of the shares and controls Loblaw. Its interests can differ from those of other shareholders. ## Links - Page: https://picks.utilarium.app/company/L/ - History of changes: https://picks.utilarium.app/company/L/history/ - JSON with full history: https://picks.utilarium.app/data/company/L.json > Picks is a personal record of stock picks. 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