Yahoo Finance Dollarama Inc. (TSE:DOL) Analysts Are Pretty Bullish On The Stock After Recent Results
Last week, you might have seen that Dollarama Inc. (TSE:DOL) released its quarterly result to the market. The early response was not positive, with shares down 2.6% to CA$124 in the past week. Dollarama reported CA$1.4b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of CA$0.77 beat expectations, being 2.1% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for Dollarama
Taking into account the latest results, the current consensus from Dollarama's twelve analysts is for revenues of CA$6.34b in 2025. This would reflect a satisfactory 6.1% increase on its revenue over the past 12 months. Per-share earnings are expected to rise 6.9% to CA$4.03. In the lead-up to this report, the analysts had been modelling revenues of CA$6.34b and earnings per share (EPS) of CA$4.02 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 8.6% to CA$130. It looks as though they previously had some doubts over whether the business would live up to their expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Dollarama, with the most bullish analyst valuing it at CA$138 and the most bearish at CA$125 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Dollarama's revenue growth is expected to slow, with the forecast 8.2% annualised growth rate until the end of 2025 being well below the historical 11% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% 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 Dollarama.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Dollarama going out to 2027, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Dollarama , and understanding these should be part of your investment process.
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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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
