Dollarama wins price target raise at National Bank

Ahead of the company’s fourth quarter results, National Bank Financial analyst Vishal Shreedhar has raised his price target on Dollarama (Dollarama Stock Quote, Chart, News, Analysts, Financials TSX:DOL).

On April 3, before the market open, DOL will report its Q4 and fiscal 2025 results. Shreedar says he anticipates good things from the upcoming results.

“We expect Q4/F25 sssg [same-store sales growth] to sequentially improve, reflecting, among other factors, two key Halloween days shifted to Q4/F25, improving article price inflation (our data suggests 2.6-per-cent year-over-year inflation), proprietary NBF data suggesting spending was strong, StatsCan data indicating solid December 2024 core retail sales and peer commentary highlighting both continued consumer pressure and cautious optimism. DOL previously guided to F2025 sssg around the midpoint of 3.5-4.5 per cent (NBF estimate is 4.4 per cent),” the analyst wrote.

As reported by the Globe and Mail, Shreeder March 20, reiterated his “Sector Perform” rating on DOL while raising his price target on the stock from $149.00 to $156.00.

“We model F2026 sssg of 3.6 per cent (vs. consensus at 3.7 per cent), with sssg to progressively accelerate through F2026 (stronger comparison in H1/F26). NBF models F2026 EPS of $4.49 (vs. cons. at $4.51), higher by 10.4 per cent year-over-year,” he said. “Our expectation reflects gross margin of 44.8 per cent (higher by 8 basis points year-over-year) and an SG&A rate of 14.4 per cent (lower by 9 basis points year-over-year).”

As for the “Sector Perform” rating, Shreedhar says this is case of good company, expensive stock.

““We continue to hold a positive view on DOL’s shares given its defensive growth orientation supported by strong cash flows, a solid balance sheet and resilient sales performance,” he added. “We also believe international growth will become increasingly important, likely aided by acquisitions. That said, given premium valuation, difficult year-over-year compares and significant capital outlay over the medium term, we expect returns to be limited until sssg returns to historical levels.”