On Wednesday, BMO Capital Markets updated its evaluation of George Weston Ltd., raising the company's price target to Cdn$196.00, up from the previous Cdn$185.00. The firm maintained a Market Perform rating on the stock. This adjustment follows the release of George Weston's first-quarter adjusted earnings per share (EPS), which fell short of expectations, primarily due to a significantly higher tax rate impacted by temporary non-core items.
The analyst noted that the holding company discount for George Weston is currently around 16%, which is a slight decrease from approximately 20% in April. However, it remains wider than the low-to-mid teens percentage observed last year. The current discount could be a factor of interest rates influencing Choice Properties Real Estate Investment Trust, which is partially owned by George Weston.
Investors have shown a recent preference for George Weston shares over those of Loblaw Companies Limited, which is also owned by George Weston, seeking exposure to Loblaw and potentially benefitting from a rally in Choice Properties' stock if interest rates are cut. This investor sentiment is based on the notion that George Weston's broader discount offers a more attractive entry point.
George Weston's financial performance and the market dynamics around its subsidiaries, including Choice Properties REIT and Loblaw, continue to be closely monitored by investors, as these factors play a significant role in the company's stock valuation and investment appeal.
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