Alimentation Couche-Tard Stock Is up 20% in 2023! Is the Stock a Buy Now?

Alimentation Couche-Tard stock (TSX:ATD) has risen 20% in 2023 alone, with more expected to come in 2024, according to analysts.

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Shares of Alimentation Couche-Tard (TSX:ATD) seemed as though they couldn’t slow down in 2023. The stock has risen 20% in 2023 alone, with the year just about to come to an end. However, at the time of writing, shares of Alimentation Couche-Tard stock are now down by 6% after hitting 52-week highs.

So, does this mean now is a great time to pick up Alimentation Couche-Tard stock on the dip? Or is there something we should fear?

Let’s look at earnings

During the second quarter, Alimentation Couche-Tard stock announced results that were quite strong, appearing to demonstrate strength going into 2024. The company reported net earnings of $819.2 million, up from $810.4 million the year before. That being said, investors weren’t happy with the $792 million in adjusted net earnings compared to $838 million the year before.

Total merchandise and service revenue reached $4.1 billion, up 1% year over year, impacted by its Fresh Food, Fast program. The company has seen growth of expenses hit 2.5%, while normalized growth of expenses remained at 1.5%. This was below the average inflation observed throughout the stock’s network, which was definitely a win.

Furthermore, Alimentation Couche-Tard stock closed the acquisition of 112 company-owned and operated convenience retail and fuel sites across the United States. So, now, it continues to have a rapidly expanding network throughout North America and Europe.

Big things in 2024

In a report by one analyst, Alimentation Couche-Tard stock was touted as a huge win for 2024. As inflation and interest rates start to get under control, consumers should come back to these consumer stocks. And of them, Alimentation Couche-Tard stock should be one to benefit.

While there are near-term catalysts, the patient investor would be wise to buy now. By the second half of 2024, any risks should change to rewards for investors — especially for the “all-season” growth of Alimentation Couche-Tard stock.

The company remains quite valuable, with same-store sales growth proving positive. Strong fuel margins were also beneficial, and cost reductions were offsetting any reduction in sales. The company continues to offer staples that consumers will purchase, helping along the company’s recovery. And with so many growth initiatives in the pipeline, the analyst predicts more organic growth.

Get it now!

Sure, shares of Alimentation Couche-Tard stock are up 20% in 2023 and have fallen back slightly. But take this as the win that it is. The company offers huge value for future-minded investors, both for 2024 and beyond.

Right now, you can pick up the stock trading at 18.1 times earnings as of writing and 0.80 times sales. It’s also remaining strong in terms of financials, with just 79% of its equity needed to cover all of its debts. Furthermore, the company has a price target consensus of $85 as of writing.

This offers up a potential upside of 13% as of writing! And again, that’s only due to climb from there. So, I would certainly consider Alimentation Couche-Tard stock a strong buy on the TSX today — even with shares up so high this year.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alimentation Couche-Tard. The Motley Fool has a disclosure policy.

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