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  5. ATD: Does 5i provide fair market value for stocks? [Alimentation Couche-Tard Inc.]
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Q: Does 5i provide fair market value for stocks? If yes, what is the fair market value of ATD pls?
Asked by Ron on June 27, 2024
5i Research Answer:

In our company research reports, we do provide the equivalent of a 'target price' on companies in our coverage list based on various models that we have developed. However, we caution investors not to rely on 'target prices' too much, as it can lead to both short-term thinking and increased expectations for what a stock might or 'should' do. Largely, anything can happen in a one-year timeframe, but what we try to provide is the probability or likelihood that certain stocks are trading at attractive valuations given their current and forward fundamentals. 

While we cannot provide a target for ATD, it trades at a historically attractive forward P/E of 18X, has growing free cash flow, and we consider it to be one of the higher quality names on the TSX. We would be very comfortable owning it today.