Couche-Tard: BMO Unconcerned With Recent Insider Sales

Last week, Alimentation Couche-Tard Inc. (TSX: ATD.B) insiders filed multiple share sales between both the Class A and B shares. Four insiders sold a combined ~4.78 million class A shares and ~8.18 million class B shares. The insiders stated that this was due to estate planning.

Alimentation Couche-Tard currently has 16 analysts covering the stock with an average 12-month price target of $58.14 or a 24% upside. Out of the 16 analysts, 3 have strong buys, 10 have buy ratings and 3 have hold ratings. The street high sits at $73.17 from Arc Independent Research while the lowest comes in at $45.

BMO Capital Markets reiterated their $59 price target and outperform rating in a note, which is giving their commentary on the recent weakness in the stock. Since the filings, the stock has been down roughly 7% as they believe these recent sales by insiders are concerning.

For the stock move, BMO Capital Markets believes this isn’t warranted and since all the selling insiders are over the age of 65, they believe that the estate planning reason is plausible. Additionally, they write that given “their substantial residual ownership positions, we do not believe a move in the stock is warranted.”

BMO additionally believes that investors could be worried about higher oil prices which would hurt the company’s margins. Although, BMO believes that this is not the case through their channel checks as they say that merchandise sales from the U.S grew 8.5% quarter to date, while the average industry U.S fuel margin is $0.32 per gallon.

Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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