Replies to post #4363 on CKUA

[johnlw]

Nice pop
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[johnlw]

Did you ever get in?

Post says RBC analyst sees Tim Hortons at $41

2007-02-06 09:09 ET - In the News

The Financial Post wonders aloud in its Tuesday edition whether the new breakfast sandwich will give Tim Hortons a sales lift. The Post's Hollie Shaw, writing in Trading Desk, says Irene Nattel of RBC Dominion Securities has increased her price target on the retailer to $41 from $38 given her view that the company should be able to generate 15 per cent or more average annual earning per share growth. Last month the chain reported better-than-expected fourth quarter same-store sales. Ms. Nattel sees a slight decline in 2007 same-store sales as the benefits from a price increase last year wears off. "However, we believe there is potential for an upside surprise to same-store sales in Canada if the breakfast sandwich maintains its early sales momentum," she wrote in a note to clients. Her revised price target was reached by applying a 24 times price-to-earnings multiple to forecast 2008 earnings per share and a 12 times forecast of 2008 earnings before interest and taxes, then taking the midpoint of the two numbers. The stock is currently trading at 25 times 2007 consensus estimates for fiscal 2007. She says consensus forecasts of 11-per-cent earnings-per-share growth are too conservative.