Dollarama (TSX:DOL) has been one of the top choices for investors these days. The essential services provider has managed to continue its strength through downturns and a pandemic. But the question is, as we continue to see some signs that a bear market may be over, is it still a good deal at this share price?
Looking ahead
Earnings are due out soon, and analysts have already been weighing in on what they foresee for the future of Dollarama stock. And overall, the view is quite positive.
Analysts believe that the company can still remain a top defensive pick, especially as we enter a rough start to 2024. Overall, analysts believe that the company is on track to strong full-year 2024 growth. That’s even if the company sees lower acquisitions and same-store growth.
Moreover, the company should enjoy higher gross margins with the market and economy under control. There continue to be lower product costs and lower transport costs, all while still bringing in higher prices for products. Further, it’s a great season for Dollarama stock. The holiday season will see a surge in seasonal categories and products.
Predictions
So, let’s get into some analyst predictions, shall we? Analysts believe that the company could achieve revenue of around $1.479 billion, or $0.86 cents per share, according to the Street’s forecast. These would be driven by strong same-store growth, which could be as high as 10%!
What’s more, there should be further growth in all product categories. So, even as prices get under control, and Canadians perhaps go elsewhere for their goods, same-store growth of 14 net new stores quarter over quarter should see a huge boost in top-line growth.
All in all, more stores, lower costs, better logistics and shipping, and the holiday season approaching should be great for Dollarama stock. This is why the company should have no problem climbing past $100 per share in the near future.
And beyond?
Here’s the thing. Dollarama stock isn’t just a great option because of its current share price and current growth. It’s a solid long-term hold as well. The company has demonstrated that it can be one of the best defensive holds to have in a Canadian portfolio.
How can you tell? During the last five years, we’ve gone through a market downturn, pandemic, and bear market and teetered on a recession for two years. And what has Dollarama stock done? It has not just survived but thrived!
Shares of Dollarama stock are now up 22% in the last year alone. Yet in the last five years, shares have more than tripled during this volatile time. And if you look at the share growth of Dollarama stock, it’s been a straight shot upwards in that time. So, if you’re looking for a company that can do it all, one that will continue to climb even in dire circumstances, Dollarama stock remains a strong defensive buy.
