Two things happened that the last report could not have known. On 31 July 2026 Couche-Tard agreed to acquire a controlling stake in Poland's Żabka Group for about US$8.6 billion — the largest acquisition in its history, fully debt-financed, taking pro-forma leverage from 1.99× to roughly 3.0× net debt to adjusted EBITDA, with management guiding to approximately US$250 million of synergies by the third year after closing. And on 14 August the US consumer data came in soft: July retail sales fell 0.6% month-on-month against a +0.1% forecast, though the miss was concentrated in nonstore retail. The shares are up 3.5% since, at C$91.96 — the Friday 14 August close, since this report is written on Saturday 15 August with the TSX shut (prior report C$88.82).
A third thing happened inside this report, and it matters more than either. A pre-publication audit found that the 25 July report scored several Business-Quality sub-signals on fourth-quarter same-store figures while labelling them full-year, and recorded net debt to EBITDA at about 0.8× when the company's own disclosure was 1.99:1. Correcting both takes Business Quality from 82 to 65. The full bridge is set out below rather than summarised, because a 17-point move in the pillar that gates the signal deserves to be shown, not asserted.
Alimentation Couche-Tard runs one of the world's largest convenience-store and road-fuel networks - 17,267 sites at last count, trading as Circle K almost everywhere and as Couche-Tard in Quebec, across North America, Europe and Asia. The business has two halves that lean on each other: a merchandise and foodservice counter that earns a 35% gross margin on drinks, snacks, tobacco and prepared food, and a forecourt that sells fuel at a thin margin measured in cents per gallon but pulls the traffic through the door. What distinguishes it from peers is not the stores themselves but the discipline of the operator behind them: Couche-Tard has spent forty years buying fragmented regional chains and independents, taking cost out, and lifting fuel margin and merchandise mix to its own standard - a formula that produced a 13.7% return on capital employed in fiscal 2026. Its scale in fuel procurement, against a US market of 151,975 convenience stores most of which are independently owned, is what makes that consolidation machine keep working. In July 2026 it agreed its largest deal ever, an US$8.6 billion move for Poland's Zabka Group.
Couche-Tard's fiscal year ends in late April, and its fourth quarter is only 12 weeks. Quarterly and full-year same-store figures diverge sharply — in FY2026 they point in opposite directions for Canada — so every figure in this section states its period explicitly. The 25 July report scored the Q4 numbers as though they were annual, which inverted the regional story; that is corrected here and disclosed in the changes box above.
Lifecycle & sector classification. Alimentation Couche-Tard is a mature, acquisitive compounder. FY2026 revenue was US$76,506.6m against US$72,856.8m in FY2025 — growth of 5.0%, and even that is flattered by the energy shock: the first three quarters grew 0.8% and Q4 alone grew 19.8% as crude spiked through February–April. Organic same-store merchandise revenue rose +1.9% in the US, +1.4% in Europe and +2.3% in Canada over the full year. Adjusted diluted EPS grew 14.4% to US$3.10. That gap between 5.0% revenue growth and 14.4% earnings growth is the whole business model: value is created by fuel margin, merchandise mix, buybacks and M&A — not by units.
Sector — and why it matters here. We classify ATD under GICS Consumer Staples (Consumer Staples Distribution & Retail). The decisive evidence is index membership, not a data-vendor label: ATD is the largest single holding of the iShares S&P/TSX Capped Consumer Staples Index ETF (XST), at roughly 27% as at 2 July 2026, which means S&P Dow Jones — the owner of GICS — assigns it to Staples. Financial Modeling Prep and Yahoo both return "Consumer Cyclical / Specialty Retail"; those are Morningstar-family taxonomies, not GICS, and we record the divergence rather than hide it. The choice is load-bearing: it sets the Consumer Staples 6% sector growth cap and the 23× guardrail in §4, and the XLP row rather than the XLY row in §6. We test the alternative explicitly in both sections — and it is the more permissive of the two, so this is the conservative reading.
The honest complication is that a fuel forecourt is not a supermarket. Roughly three-quarters of ATD's revenue is road-transportation fuel, whose volumes behave cyclically — full-year same-store fuel volumes fell 1.0% in the US and 2.2% in Europe, though they rose 2.5% in Canada. So we carry a discretionary/fuel overlay through the report: it does not change the sector row, but it caps the Economic-Alignment conviction (§6) and holds the timing macro weight at the Medium 15% band rather than the Low 10% band that pure Staples would earn.
| Sub-signal | Reading — period stated | Sector / peer reference | Score | Rationale |
|---|---|---|---|---|
| Revenue trajectory | FY2026: revenue US$76,506.6m vs US$72,856.8m, +5.0%; same-store merchandise US +1.9%, Europe +1.4%, Canada +2.3%; same-store fuel volumes US −1.0%, Europe −2.2%, Canada +2.5%. Q4 FY2026 for contrast: consolidated same-store merchandise +2.2% (US +3.4%, Europe +1.1%, Canada −0.9%); fuel volumes US −2.1%, Europe −4.4%, Canada +2.0% | Retail comps of 3–5% are healthy; negative comps are a red flag | 54 | Below the healthy band, but positive everywhere. US comps of +1.9% do not support a strong score on our own rubric. What redeems it is breadth — all three regions positive on the full year, with Canada the strongest, not the weakest (the opposite of what a Q4-only reading suggests). Headline revenue growth of 5.0% is respectable for Staples but is largely fuel-price pass-through plus 299 acquired stores, so it must not be read as organic strength. |
| Profitability vs peers | FY2026: merchandise & service gross margin 35.2% (35.4% in Q4); US road-fuel gross margin 47.49¢/gal for the year and 52.44¢/gal in Q4 against 43.27¢ in Q4 FY2025; Europe 13.44 vs 9.57 US¢/litre and Canada CA17.28 vs 14.05¢/litre in Q4; operating margin 5.97%, EBITDA margin 9.36%; ROCE 13.7%, up from 12.2%; adjusted diluted EPS +14.4% | Casey's operating margin 5.35%, Murphy USA 4.91% (Yahoo, TTM) | 75 | Margins expanded on both legs simultaneously and return on capital rose 150bp. Scored on the full-year +14.4% adjusted EPS growth, not the Q4 optics — the prior report cited +58.7%, which is a quarter measured against an unusually weak comparative. |
| Cash generation | Free cash flow US$2.36bn ≈ C$3.28bn; conversion to net income about 75%; FCF margin 3.1%; FCF yield 3.56% on enterprise value | FCF yield of 3–5% is "fair" for a quality compounder; above 5% is attractive | 62 | Scored against the explicit yield anchor rather than described as "strong". Cash conversion is adequate for a capex-heavy store-building business — enough to fund the dividend and a C$2.2bn buyback comfortably, nowhere near enough to fund an US$8.6bn acquisition, which is why Żabka is entirely debt. |
| Balance-sheet health | Leverage 1.99:1 at 26 April 2026 — the company's own disclosed figure; net interest-bearing debt US$16.4bn; current ratio 1.12; interest cover roughly 10×. Pro-forma leverage ~3.0× at Żabka close | Below 2.0× is healthy for retail; above 4.0× is where the Do-Not-Buy leverage trigger begins | 60 | This score corrects an error, not just a change. The 25 July report recorded net debt to EBITDA at "≈0.8×" and scored 85 on it; the disclosed figure is 1.99:1. On the corrected base the position is comfortable but unremarkable, and the deal takes it to roughly 3.0×. Management guides back inside its framework range by year two post-close and expects no rating impact; the €750m 2033 issue at a 3.90% coupon shows the funding is long and fixed. |
Universal sub-signal average = (54 + 75 + 62 + 60) ÷ 4 = 62.75.
Full-year FY2026 same-store merchandise revenue of +1.9% (US), +1.4% (Europe) and +2.3% (Canada) — positive in every region but all three below the 3–5% healthy band — with merchandise gross margin expanding to 35.2%, against full-year same-store fuel volumes of −1.0% in the US and −2.2% in Europe. Rating: MIXED — positive comps and expanding margin, undercut by sub-par comp growth and falling fuel traffic. Benchmark score: 60/100, down from 80 last run: about half of that fall is the FY-versus-Q4 correction and about half is a data gap — the income-statement endpoint returned no balance sheet, so inventory turnover could not be computed, and the benchmark is scored on comps and merchandise margin alone. That gap is logged in §15 rather than filled with an estimate.
Moat score: (68 + 50 + 40 + 72 + 62) ÷ 5 = 58.4 → 58/100, rounded down. Carrying the 58.4 would lift Quality to 65.36; the rounded 58 is the conservative choice and is what every figure in this report uses. That is a re-derivation, not a downgrade of the business. The 25 July report printed a moat average of "≈70", but its own published sub-scores were 45 / 40 / 85 / 70 plus pricing power — which do not average to 70. Step 7c requires the sub-scores to be derived from the named-competitor read rather than asserted, and that is what is done below.
ATD is the clear number two in North American convenience retail and — on store counts — is currently gaining ground on the number one while losing it to the regional food-service specialists. Nothing here threatens the business model; it does explain why switching costs and pricing power cannot carry high scores.
| Named competitor | Threat type | Share trajectory vs ATD | Moat-erosion vector |
|---|---|---|---|
| 7-Eleven (Seven & i Holdings) | Direct merchant rival, number one by store count | ATD gaining. 7-Eleven's US count fell from 12,601 to 12,414 while Circle K's grew from 5,833 to 6,038 — against a US universe of 151,975 stores. Number one is shrinking; number two is building. | Still formidable scale in fuel procurement and private label, plus a proprietary EV-charging network. ATD's own US$47bn bid for Seven & i (withdrawn July 2025 for lack of engagement) is the clearest statement that ATD sees this rival's assets as strategically decisive. |
| Casey's General Stores | Direct merchant rival, number three; the largest US-owned chain | ATD stable to slightly losing in the Central US — Casey's at 2,899 stores is compounding faster off a smaller base and trades at 44.3× trailing earnings on that growth | Prepared-food economics (pizza) that carry far higher gross margin than ATD's average merchandise basket, plus entrenched small-town locations ATD cannot easily contest. |
| Wawa, Sheetz, Kwik Trip, Buc-ee's | Regional food-service specialists — the sharpest erosion vector | ATD losing in contested metros: Wawa has been expanding into Alabama, Indiana, Georgia, Kentucky, North Carolina and Ohio | Fresh-food destination traffic beats convenience-of-location. This is exactly what pulls the switching-cost sub-score down to 40 — these operators win on a reason to make a special trip, which is the one thing ATD's location moat does not defend against. |
| Murphy USA and hypermarket fuel | Low-cost fuel entrants | Stable — Murphy USA trades at 17.4× trailing earnings on a leaner, fuel-led model | Structurally lower operating cost per site caps how far ATD's cents-per-gallon ratchet can run before it invites price competition. |
| Electric-vehicle transition | Technological substitution of the fuel P&L | Slow but one-directional; full-year same-store fuel volumes −1.0% in the US and −2.2% in Europe | Long-dated rather than existential. ATD is buying optionality: Ionna will deploy high-powered charging at more than 350 Circle K sites, with the first live by end-2026. It is not yet enough to offset volume decay. |
Net effect on the moat: Switching Costs trimmed to 40 and Pricing Power held at 68 rather than higher, on the food-service share loss and fuel-volume decay; Cost Advantage marked to 72 from the 85 carried last run — real, and evidenced by the store-count divergence against 7-Eleven, but not the near-unassailable advantage an 85 implies against operators like Murphy USA. Overall competitive threat level: elevated; share trajectory: stable — gaining on the leader, losing to the specialists, which nets out. This read is carried into the §11 bear trigger and the §12 thesis-invalidation rule.
Return on capital (40%): 82. Company-reported return on capital employed of 13.7% in FY2026, up from 12.2%, comfortably above an estimated 7–8% cost of capital and rising for a third year. Return on equity 20.1%; return on assets 7.1%. Against listed c-store peers (Casey's ROE 19.2%; Murphy USA's 86% is a leverage artefact, not a quality signal) that places ATD in the upper quartile. Peer ROIC was estimated from company disclosure and peer quotes rather than a sourced dataset — the confidence haircut in §15 reflects that.
Capital-allocation discipline (30%): 82. FY2026: 30.0 million shares repurchased for US$1.6 billion, roughly 3.2% of the count; the dividend raised 10.5% from CA76¢ to CA84¢ annually; 299 stores acquired; 103 new-to-industry stores built. The most informative decision was a negative one — walking away from the US$47 billion Seven & i proposal in July 2025 rather than chasing an unwilling board. That is the behaviour of a disciplined acquirer, and it is the main reason we still credit the Żabka price: RBC puts the offer at about 10× Żabka's adjusted EBITDA for a business with 28 consecutive years of double-digit top-line growth, against management's guided ~US$250m of synergies by year three.
Management skin in the game (30%): 78 — raised from 72. This sub-score measures three things and only three: insider ownership, share-based compensation as a drag on holders, and recent insider buying versus selling. On the first, co-founder and chairman Alain Bouchard holds a 13.5% economic stake per the 2026 proxy and the founding group holds multiple-voting shares — ownership that is both large and genuinely long-dated. On the second, share-based compensation is modest by retail standards and the share count is falling: 30.0 million shares, about 3.2%, retired in FY2026, so holders are being concentrated rather than diluted. On the third, no net insider buying was verified — our search returned only the proxy ownership disclosure, and SEDI was not queried directly (§15 records this as an absence of evidence). That missing leg is precisely what keeps the score below the 80–100 band. Why it rose from 72: the prior 72 was depressed by a reason that appears nowhere in this rubric — an assumption that Alex Miller was a brand-new chief executive — and that assumption was also factually wrong, since he has held the role since 6 September 2024, roughly 23 months. Removing an off-rubric penalty is what moves the number; the deal record is scored under Capital-allocation discipline above and is deliberately not counted twice here.
Block score = 82 × 0.40 + 82 × 0.30 + 78 × 0.30 = 80.8.
universal sub-signals 62.75 × 0.40 = 25.10 · moat 58 × 0.20 = 11.60 · ROIC/capital block 80.8 × 0.22 = 17.78 · industry benchmark 60 × 0.18 = 10.80. Sum = 65.276 → 65.
On the weights themselves. Only the industry-benchmark weight is pinned by the framework, which specifies 15–20%; 0.18 sits inside that. The other three — 0.40 universal, 0.20 moat, 0.22 ROIC/capital — are analyst judgement, and readers should know they are a choice rather than a rule. They are also the less favourable choice: on the alternative 0.30 / 0.25 / 0.25 / 0.20 split the same four inputs give 65.53, a margin of 0.53 rather than 0.28. The weighting used here tightens the margin against the BUY, not toward it.
It clears the "High" threshold of 65 — by 0.28 of a point. That is not a comfortable margin and we will not present it as one. Business Quality at 65 keeps the Decision Matrix on the row High (≥65) · Fair (40–64) · Improving (≥55) → BUY, which is what produces the Medium and Long BUY signals. The row immediately below — Medium (40–64) · Fair · Any — is HOLD. The per-point sensitivities are not equal, and the honest version is more specific than "one point anywhere": the moat carries 0.20 of a Quality point per point, the benchmark 0.18, and the revenue sub-signal only 0.10 because it is one of four averaged inputs. So breaching 65 takes roughly 1.4 points off the moat, 1.5 off the industry benchmark, or 2.8 off revenue trajectory — a single point off any one of them leaves Quality at 65.08, 65.10 or 65.18 respectively, still clear. Readers should treat the Medium and Long BUY as conditional on a business-quality read that is sitting on the boundary, and the 1 September quarter — the next hard data on comps and cents-per-gallon — as the test that resolves it. The nearest thing to a tiebreaker is that every one of the four inputs above is scored on corrected, period-labelled figures for the first time, so the number is more trustworthy than its predecessor even though it is lower.
ATD reports in US dollars and trades in Canadian dollars. Every multiple in this section converts the earnings side into CAD at USD/CAD 1.39271 (Yahoo CADUSD=X 0.718025, Friday 14 August 2026 close) before dividing the CAD share price. Concretely: FY2026 reported diluted EPS of US$3.37 becomes C$4.69, and adjusted diluted EPS of US$3.10 becomes C$4.32. The check that this rate is the right one: C$4.69 divided into C$91.96 gives a trailing P/E of 19.61×, which reproduces Yahoo's own trailing P/E for ATD.TO exactly. Share price, price targets, scenario levels, the dividend and the fair-value estimate are all in CAD. Revenue, earnings, debt and fuel margins as quoted by the company are in USD and are labelled as such. Two provider fields were discarded for exactly this reason: Yahoo's enterprise value of C$90.0bn adds USD debt to a CAD market capitalisation, and its "operating margin" of 9.25% is in fact the EBITDA margin. Both were recomputed by hand.
Discount rate r = 9.13% = 4.63% risk-free + 4.50% equity risk premium + 0.0% risk add-on, because Business Quality of 65 clears the 65 threshold — by 0.28 of a point, as §3 sets out. Provenance of the risk-free, stated precisely: 4.63% is the FRED DGS10 print for 13 August 2026, pulled directly this run. It is not the figure carried in the macro report of 12 August, which records 4.70%. Sensitivity, so the choice is auditable rather than convenient: at 4.70% the warranted multiple falls to 18.89× and the ratio rises to 1.13 — still the Fair band, still under the guardrail, no signal change. The lower rate is mildly favourable to the stock, and using it is a deliberate choice of the freshest available print, not an accident.
Growth. Consensus forward EPS of C$5.029 against clean trailing EPS of C$4.32 implies +16.48%. Haircut by 25% that is 12.36% — which the Consumer Staples sector-achievable cap of 6% then binds. So g_near = 6.0%, g_term = 3.0%. The cap binds for any consensus growth above about 8%, so the warranted multiple is insensitive to exactly where the FY2027 consensus settles after the deal — which matters, because those estimates may not yet reflect Żabka's first-year dilution.
Two-stage warranted P/E: five-year stage 4.586 + discounted terminal 14.527 = 19.11×, below the 23× Consumer Staples guardrail, so the guardrail does not cap it.
Actual clean multiple = 21.30× — C$91.96 ÷ C$4.32 adjusted EPS. Ratio 21.30 ÷ 19.11 = 1.11 → FAIR band (1.00–1.20). Reported trailing P/E is 19.61× on C$4.69; we score the clean number.
Guardrail test: 21.30× against the Consumer Staples line of 23.0× — not breached, with about 8% of headroom. Had we taken the vendor "Consumer Cyclical" classification instead, the Discretionary line of 24.0× would also be unbreached, but the 10% growth cap would lift the warranted multiple to about 22.6× and the ratio to 0.94 — an Attractive/Fair-edge read rather than Fair. The Staples classification is therefore the more conservative of the two, and it is the one the index membership supports.
| Lens | Weight | Reading | Score |
|---|---|---|---|
| Warranted-multiple anchor | 40% | 21.30× actual vs 19.11× warranted = ratio 1.11, in the upper half of the Fair band | 56 |
| Sector / peer median | 20% | Forward P/E of 18.29× against Casey's 35.8× and Murphy USA 18.6× forward — a very wide discount to the growth peer, in line with the value peer — and below the roughly 20–21× at which the S&P Consumer Staples sector trades | 72 |
| Own five-year history | 15% | Reported 19.61× sits at the 71st percentile (8th decile) of ATD's own 13.5×–22.1× five-year range; the clean 21.30× sits at the 91st percentile. Five-year average 16.8×, median 16.9× | 20 |
| Growth-adjusted (PEG) | 10% | Clean PEG 1.29 on the 16.48% consensus growth (Yahoo's headline PEG is 1.52) | 55 |
| Analyst consensus | 15% | Consensus C$101.52 versus C$91.96 = +10.4% upside, inside the "10–20% below consensus" band. Range C$87.92–C$109.74 across 17 analysts — a high/low spread of only 1.25×, so genuine agreement. Grades: 5 strong buy, 8 buy, 5 hold, 0 sell — 72% bullish | 72 |
Weighted result 56.1, plus a +3 embedded-optionality tilt → Valuation 59/100, band Fair. The single unflattering lens is the own-history decile, and it is the one worth sitting with: ATD has never been cheap on this metric in five years and the clean multiple is now near the top of its own range.
Free cash flow of US$2.36 billion converts to C$3.28 billion. Against an enterprise value of about C$92.2 billion — market capitalisation C$84.42bn plus borrowings-less-cash net debt of US$5.55bn — that is a 3.56% FCF yield; on market capitalisation alone, 3.89%. On the company's own lease-inclusive net interest-bearing debt of US$16.4bn the enterprise value is about C$107.3bn and the yield 3.06%. All three readings land in the 3–5% "fair for a quality compounder" band. Nothing here says cheap.
At C$91.96 on clean earnings of C$4.32, the market is paying 21.30× for a business our disciplined model says warrants 19.11×. Backed out, the price embeds roughly 8% sustained near-term growth against our capped 6% — so the price carries about two points a year more growth than the Staples framework will underwrite. That is a modest overshoot, not a bubble: it is why this reads Fair rather than Attractive, and why the medium and long signals are BUY rather than STRONG BUY. Anchoring on forward rather than trailing earnings tells the friendlier version of the same story — 19.11× × C$5.029 forward EPS gives a forward-anchored fair value of about C$96 against the trailing-anchored C$82.51. We use the trailing anchor as the fair-value estimate because it does not pay in advance for earnings not yet delivered, and because the deal's first-year dilution sits inside that forward number.
Price targets (17 analysts): low C$87.92 (−4.4%) · consensus C$101.52 (+10.4%) · median C$101.50 · high C$109.74 (+19.3%). The low target sits below the current price, which is worth noticing — at least one house thinks the shares have run ahead of the fundamentals.
Grades: 5 strong buy · 8 buy · 5 hold · 0 sell · 0 strong sell — 72% bullish, recommendation mean 1.83. Solid buy consensus with meaningful caution, not an extreme that would invite a contrarian read.
Post-deal actions (web-sourced; the grades endpoint failed this run — see §15): Scotiabank raised its target from C$94 to C$107, Outperform maintained. RBC's Irene Nattel raised from C$104 to C$106, Outperform maintained, calling the Żabka move "bold" and "measured". BMO's Etienne Ricard raised from C$84 to C$95 but stayed Market Perform, noting the shares had already risen about 20% year-to-date and that near-term benefits are limited. Three raises, no downgrades — but the split between Outperform and Market Perform is the whole debate in miniature.
FMP financial-health cross-reference: rating A−, overall score 4 of 5. Sub-scores: return on equity 5, discounted cash flow 4, return on assets 4, price/earnings 3, debt/equity 2, price/book 2. The independent read agrees with ours on both sides — high returns, unremarkable price.
A convenience-and-fuel retailer answers to two external forces, and they do not move together. We score both and weight them by profit leverage.
This is the dominant swing factor in the P&L. It is critical to get the sign right: ATD is a fuel retailer, not a producer. Its margin is the spread between the street price and the wholesale rack, and street prices are sticky — so a falling or flat wholesale trend expands cents per gallon, while a sharp rally compresses it. This is the inverse of how the same crude tape reads for an E&P name.
Crude price-trend overlay (measured this run, raw closes, auto_adjust=False): WTI front-month US$82.40 at the 14 August 2026 close, above a falling 50-day average of US$79.55 whose slope is −6.8% over the last 20 sessions; 200-day US$76.84. Momentum: 4-week −0.1%, 6-week +20.0%, 13-week −19.4%. The 52-week range is US$55.27–US$112.95 and spot sits at the 47th percentile of it. Translation for ATD: the wholesale trend is flat-to-down from the April spike, which is the favourable configuration for retail margin — but the +20% six-week window shows how violently this can reverse under the energy-shock regime. Levels are quoted to the CL=F front-month future, not to an ETF proxy.
| Horizon | Evidence and date | Score |
|---|---|---|
| Historical (25%) | US road-fuel gross margin stepped from 43.27¢/gal in Q4 FY2025 to 52.44¢/gal in Q4 FY2026, +21% year-on-year; the full-year FY2026 figure was 47.49¢. Europe rose from 9.57 to 13.44 US¢/litre and Canada from 14.05 to CA17.28¢/litre on the same quarterly comparison. The industry-wide ratchet — rising card and labour costs lifting the breakeven cents-per-gallon and forcing independents out — is intact. (Company release, 22 June 2026) | 85 |
| Current (50%) | Level favourable and wholesale direction favourable, per the trend overlay above. Against that, the pump price is doing damage: the US national average jumped 15¢ to US$4.09/gal in July 2026, and full-year same-store fuel volumes fell 1.0% in the US and 2.2% in Europe. The EIA's Short-Term Energy Outlook expects retail and distribution margins to widen by roughly 10¢/gal in Q3 2026. Margin per gallon up, gallons down. | 70 |
| Forward (25%) | EIA guides to Q3 margin expansion, but crude is whippy under a supply-driven inflation impulse and a renewed spike would compress cents-per-gallon and accelerate the volume decline at the same time. Structural support from continued independent-operator attrition. | 62 |
Driver 1 = 85 × 0.25 + 70 × 0.50 + 62 × 0.25 = 71.75 → 72/100 — Tailwind.
This governs the merchandise basket, which carries the 35.2% gross margin that makes the model work. It weakened on the morning before this report was written — but by less than the headline suggests, and the distinction matters.
| Horizon | Evidence and date | Score |
|---|---|---|
| Historical (25%) | Full-year FY2026 same-store merchandise revenue: US +1.9%, Europe +1.4%, Canada +2.3% — the strongest of the three. Positive in every region but all below the 3–5% band that counts as healthy in retail. Note this is the opposite of the Q4-only picture (Canada −0.9%), which is why the period label matters. | 55 |
| Current (50%) | 14 August 2026 prints: US retail sales fell 0.6% month-on-month in July against a +0.1% forecast. Read the composition before the headline: the miss was concentrated in nonstore retail at −2.2%, widely attributed to Amazon shifting Prime Day from July into June — a calendar pull-forward, not a collapse in household spending, and nonstore is not where a convenience basket is sold. Ex-gas-and-autos was −0.2% against +0.3%, and year-on-year growth decelerated to 5.0% from 6.8%. Michigan consumer sentiment printed 51.0 against 54.5 forecast and 55.2 prior, with one-year inflation expectations at 4.3%. Initial jobless claims 209k against 202k. Atlanta Fed GDPNow for Q3 cut to 4.3% from 5.8%. The picture is a softening consumer with elevated inflation expectations — not the sharp break the retail-sales headline implies on its own. | 45 |
| Forward (25%) | Fed cuts are priced out (2-year 4.15% against a 3.63% funds rate) so no monetary relief is coming to the consumer inside the horizon. Trade-down does send some traffic toward value-priced convenience formats, which is a partial offset — but basket size compresses first. | 38 |
Driver 2 = 55 × 0.25 + 45 × 0.50 + 38 × 0.25 = 45.75 → 46/100 — Headwind.
Driver score = 72 × 0.60 + 46 × 0.40 = 61.5 → 62/100 — NEUTRAL (50–64). That is below the 65 tailwind threshold, so this name is not eligible for amplification at any horizon: a BUY stays a BUY and cannot become a STRONG BUY, whatever the economy does. Per horizon the mix differs — short-term the consumer data dominates and the driver reads about 56; medium-term 62; long-term nearer 66 on the structural fuel-margin ratchet and industry consolidation. Only the long horizon reaches the amplification bar, and there the economic pressure is Neutral rather than Tailwind (see §6), so no amplification fires anywhere.
Thesis-invalidation floor. The case breaks if US road-fuel gross margin mean-reverts below roughly 42¢/gal while same-store merchandise comps turn negative. Both halves are needed: fuel margin alone can carry a soft consumer, and merchandise alone can carry a soft fuel quarter, but not both at once. Neither is broken today — full-year US comps are +1.9% and cents-per-gallon is at a record — but the consumer dial has started to move, and it would be wrong to write that nothing is flashing.
Driver confidence: 62. Base 70, less 10 because retail fuel margin depends on a volatile crude tape with low forecast reliability, plus a small deduction for reading the consumer from a single day's prints rather than a confirmed trend.
The macro report of 12 August 2026 describes an energy-shock stagflation regime: a supply-driven inflation impulse hitting a contracting labour market, with Fed cuts priced out - the 2-year at 4.15% against a 3.63% funds rate - and a live hike-versus-hold debate. Its sector row for Consumer Staples (XLP) reads Neutral / Outperform / Neutral across short, medium and long. Anchoring on the medium horizon as the framework requires, the economic pressure on this name is a Tailwind, and a long position is therefore Trend-Following - you are riding the rotation into defensives that a stagflationary regime produces, not fighting it.
Conviction is held down to 52, and here is why. First, the tailwind is narrow: only the medium horizon is Outperform; short and long are both Neutral, so there is no economic amplification available at either end - which matters, because the long-horizon driver at 66 would otherwise qualify. Second - and this is the honest complication - we considered mapping ATD to Consumer Discretionary (XLY: Strong-Underperform / Underperform / Neutral), which would have flipped the medium-horizon pressure from Tailwind to Headwind and made a long position Contrarian. We rejected that mapping because index membership settles it: ATD is the largest holding of the iShares S&P/TSX Capped Consumer Staples Index ETF at roughly 27%, so S&P Dow Jones - GICS's owner - files it under Staples. But the fuel forecourt is genuinely cyclical, full-year same-store fuel volumes fell 1.0% in the US, and the 14 August sentiment print lands on ATD's merchandise basket the way it lands on a discretionary retailer. Taking the Staples row at full conviction would be dishonest, so we take it at half.
Effect on the signal: none. Amplification requires a driver of 65 or better and a Tailwind pressure. Medium pairs a Tailwind with a driver of 62; long pairs a driver of 66 with a Neutral pressure. Neither combination qualifies, so this Tailwind enabled no STRONG BUY at any horizon and left the base signals exactly as the Decision Matrix set them.
Source: sector-map (GICS Consumer Staples → XLP); ATD is not on the macro report's watchlist-forecast list · Macro report 2026-08-12
| Component | Weight | Reading | Score |
|---|---|---|---|
| Multi-timeframe trend | 30% | All five timeframes read up. Daily is a strong uptrend with price above a rising 50-day (C$89.17, slope +6.0% over 20 sessions) and far above the 200-day (C$79.83). Monthly and weekly both flag a resistance breakout. See §9. | 78 |
| Risk-reward / position risk | 20% | Price sits at the 88th percentile of its 52-week C$68.30–C$95.15 range and 3.4% under the high. Nearest daily support cluster C$89.08 / C$88.74 / C$88.04, with the rising 50-day at C$89.17. A stop at C$88.00 is 2.26 ATR away on a daily ATR of C$1.75 — moderate, not tight — and risks 4.3%. Reward to the C$102 base case is 10.9%, so the ratio is a respectable 2.5:1. Penalised for sitting within 3.5% of overhead resistance, and marked down further because the one-month relative strength has turned negative against both SPY and XLP. | 42 |
| Macro overlay | 15% | Fed on hold with cuts priced out and a live hike-versus-hold debate, scored 32. VIX at 14.63 (13 August) is risk-on, scored 80. Curve positively sloped — the 13 August pair is 10-year 4.63% over 2-year 4.15%, a spread of 48bp; FRED's own T10Y2Y series printed 0.51 on 14 August, so the curve is steepening — scored 72. Sector regime scored 62: XLP carries a medium-horizon Outperform, but the Canadian staples index XST is 1.1% below its own 50-day, and ATD is roughly 27% of it. | 62 |
| Sentiment | 18% | Three target raises inside two weeks and no downgrades: Scotiabank to C$107, RBC to C$106, BMO to C$95. Grades consensus 72% bullish. News tone constructive on Żabka — "bold" and "measured", multiple "reasonable". Set against a market digesting a soft consumer print. | 74 |
| Catalyst density | 17% | Two dated events in the next three weeks: the Żabka voluntary tender is expected to open around 26 August for an initial 30 days, and Q1 FY2027 results land on 1 September after the close — 17 days from this report — with the call on 2 September. Neither falls inside 14 days, so the earnings gate does not fire; but the calendar is not clear either. | 55 |
Timing = 78 × 0.30 + 42 × 0.20 + 62 × 0.15 + 74 × 0.18 + 55 × 0.17 = 63.8 → 64/100 — Improving (≥55 band). The tape is genuinely good; the entry is not. That distinction is the whole of §12.
Every figure below is computed from a common anchor date to the same 14 August 2026 close, on raw unadjusted series, after forward-filling for the differing TSX and NYSE trading calendars. An earlier draft of this report compared each series to its own n-bars-ago value, which silently used three different anchor dates and materially overstated the one-month sector relative — that is corrected here.
One month (14 July anchor): ATD +1.58%, SPY +3.26%, XLP +3.20%, XST −1.54%. So ATD has lagged the S&P by 1.7pp and its US sector by 1.6pp, while beating the Canadian staples index by 3.1pp. Three months (14 May anchor): ATD +15.94%, SPY +3.77%, XLP +1.31%, XST +5.78% — outperformance of +12.2pp, +14.6pp and +10.2pp respectively.
The honest reading is a split one: on the framework's scale this is "outperforming on one timeframe, underperforming on the other", not the unambiguous leadership a three-month-only view suggests. The three-month strength is real and mostly earned in the single 23 June session; over the four weeks since, ATD has gone sideways while the index rose. That is what a stock does after it has re-rated — and it is a second, independent reason the entry is poor. Relative-strength comparisons use total-return-comparable series; every "above or below the moving average" statement in this report is computed on raw, unadjusted closes.
Analyst grade actions. The FMP grades endpoint returned HTTP 402 this run, so firm-level actions were sourced from published broker notes instead and are listed above. Net: three price-target increases, zero downgrades, in the 30 days to 14 August. Ratings themselves were maintained rather than upgraded — the money moved, the conviction did not.
Catalyst inventory. (1) Żabka tender opens about 26 August 2026, 30-day initial acceptance window. (2) Q1 FY2027 results 1 September 2026 after the TSX close — the first print carrying post-deal commentary, plus a fresh read on cents-per-gallon and comps. This is also the test of the §3 knife-edge: Business Quality clears its threshold by 0.28 of a point, and the comps line in this print is the single largest input to it. (3) Regulatory clearances through H2 2026: European Commission or Poland's UOKiK merger control, Romanian foreign-direct-investment screening, and EU Foreign Subsidies Regulation clearance. (4) No dividend action expected until the November declaration.
Timing confidence: 64. Base 75, less 11 for the failed grades endpoint forcing the sentiment sub-signal onto a web fallback. No earnings-proximity penalty (17 days out), no VIX penalty (14.63), no clustering penalty (55).
| Date | Event | Impact | Forecast | Previous | Relevant? | Why |
|---|---|---|---|---|---|---|
| 2026-08-17 | NY Empire State Manufacturing (Aug) | Medium | 10.2 | 15.6 | ⚠ Medium | Broad activity read; second-order for forecourt traffic |
| 2026-08-18 | Housing Starts / Building Permits (Jul) | High | 1.35M / 1.37M | 1.427M / 1.374M | ⚠ Medium | Household formation feeds miles driven, which feeds fuel volumes |
| 2026-08-26 (expected) | Zabka voluntary tender offer opens - 30-day initial window | High | — | Agreement signed 31 Jul 2026 | ✅ Yes | Company-specific. Starts the acceptance clock on an US$8.6bn debt-funded acquisition |
| 2026-09-01 | ATD Q1 FY2027 results, after the TSX close - 17 days out | High | — | FY26 adjusted EPS US$3.10 | ✅ Yes | First print with post-deal commentary; fresh reads on cents-per-gallon and same-store comps - and the test of a Business-Quality score sitting 0.28 above its band boundary |
| H2 2026 | EC/UOKiK merger clearance · Romanian FDI screening · EU Foreign Subsidies Regulation | High | — | — | ✅ Yes | Conditions precedent to closing; completion guided by December 2026 at the latest |
| Date | Event | Actual | Forecast | Surprise | Impact |
|---|---|---|---|---|---|
| 2026-08-14 | Retail Sales MoM (Jul) | -0.6% | +0.1% | Large miss, but concentrated in nonstore at -2.2% | Mildly negative - the nonstore miss is widely attributed to a Prime Day calendar shift into June, not a convenience-basket signal |
| 2026-08-14 | Retail Sales ex gas & autos MoM (Jul) | -0.2% | +0.3% | Miss | Negative - core discretionary spend, which is where the 35% gross margin sits |
| 2026-08-14 | Michigan Consumer Sentiment (Aug) | 51.0 | 54.5 | Miss; down from 55.2 | Negative - the cleanest read here, and trade-down risk to basket size |
| 2026-08-14 | Michigan 1-yr inflation expectations (Aug) | 4.3% | 4.2% prior | Above | Negative - a real-income squeeze on ATD's core customer |
| 2026-08-13 | Producer Price Index MoM (Jul) | 0.0% | +0.2% | Below | Mildly positive - input-cost relief on the merchandise side |
| 2026-08-13 | Initial Jobless Claims (Aug/08) | 209k | 202k | Above | Negative - a softening labour market caps miles driven |
| 2026-08-12 | 10-Year Note Auction | 4.683% | — | Prior 4.58% | Negative - a higher risk-free rate lowers every warranted multiple, including this one |
No high-impact release falls inside three trading days, so the WAIT-FOR-EVENT override does not apply - and Consumer Staples is not a high-macro-sensitivity sector in any case. The relevant point is the tape behind rather than the calendar ahead: the 14 August consumer block came in worse than forecast across the board. It is worth reading the composition before the headline, though - the -0.6% retail-sales miss was driven by nonstore retail at -2.2%, a category ATD does not compete in and one whose weakness is widely attributed to Amazon moving Prime Day from July into June. The cleaner negative signal is Michigan sentiment at 51.0 with one-year inflation expectations at 4.3%. The 13 August PPI miss cuts the other way, easing input costs. Net: mildly negative for the near-term merchandise line, neutral-to-positive for fuel margin.
| Timeframe | Trend | Direction | RSI | MACD | Key S/R | Breakout | Vol |
|---|---|---|---|---|---|---|---|
| Monthly | Uptrend ↑ | Bullish | 64.7 | +4.50, hist +1.70 | S: 63.29 · R: 95.15 | Resistance breakout | 0.49x |
| Weekly | Uptrend ↑ | Bullish | 64.4 | +4.05, hist +0.73 | S: 75.04 · R: 95.15 | Resistance breakout | 0.81x |
| Daily | Strong uptrend ↑ | Bullish | 56.3 | +1.16, hist +0.04 flattening | S: 89.08 / 88.04 · R: 93.63 / 95.15 | Resistance breakout | 0.43x (14 Aug: 657,900 vs 1.51m 20-day avg) |
| Hourly | Uptrend ↑ | Neutral | 50.9 | -0.05, hist -0.02 | S: 91.95 · R: 93.68 | — | 1.90x |
| 15-min | Uptrend → | Neutral | 55.2 | +0.00, hist +0.01 | S: 91.95 · R: 93.26 | Support breakdown | 5.0x |
| Confluence: Strongly Bullish - but extended and unconfirmed by volume · MTF Score 78 | |||||||
Every timeframe points the same way, which is the cleanest configuration this framework recognises, and on the daily chart price sits above a 50-day average of C$89.17 that is itself rising at 6.0% over the last 20 sessions, far above a 200-day at C$79.83. The caveat is what the numbers do not show. Volume confirms nothing: the Friday 14 August session traded 657,900 shares against a true 20-day average of about 1.51m — roughly 0.43× — and the monthly and weekly bars are running at 0.49× and 0.81× of their own averages. A breakout on volume this thin is a suspect breakout. And price is 3.4% below the C$95.15 52-week high while sitting at the 88th percentile of its own annual range — the textbook "strong trend, poor entry" pattern, corroborated by the one-month relative strength having turned negative against both SPY and XLP. The constructive read is that the June gap from C$82.26 to C$91.87 on the FY2026 results has been fully digested rather than given back, which is what a real re-rating looks like. The setup this framework wants is a pullback into the rising 50-day near C$89, not a chase into overhead supply at C$95. Every moving-average statement here is computed on raw, unadjusted closes (auto_adjust=False); with a dividend yield of only 0.94% the adjustment gap is immaterial for ATD, but the discipline is applied regardless.
Six months of daily closes to the Friday 14 August 2026 close (raw, unadjusted) with the 50-day simple moving average. The 23 June gap from C$82.26 to C$91.87 is the reaction to FY2026 results; the shares have held that gain, though they have gone broadly sideways for the four weeks since mid-July. Price C$91.96, 50-DMA C$89.17 and rising at about C$1.41 a week, 200-DMA C$79.83.
What has to happen: crude drifts lower from US$82 and US cents-per-gallon holds above 50¢ through the winter; same-store merchandise comps re-accelerate from the full-year +1.9% toward +4% as trade-down sends traffic into value convenience formats; the Zabka tender clears its regulatory conditions early and the guided US$250m of synergies is confirmed or raised; and the market re-rates ATD to 23x - the top of its own five-year range - on FY2027 consensus earnings of C$5.03. Why it is only a 22% weight: it needs comps to roughly double from their full-year run-rate within a quarter, and the August consumer data points the other way.
The centre of gravity. Q1 FY2027 on 1 September delivers US comps around +2% and cents-per-gallon in the high forties to low fifties; the Zabka tender completes by December 2026 with the guided first-year EPS dilution absorbed; FY2027 adjusted EPS lands near C$4.75 after that dilution, and the shares hold about 21.5x - close to where they trade now. That is +10.9% from C$91.96, and it sits almost exactly on the 17-analyst consensus of C$101.52. You are paid for compounding, not re-rating.
What breaks it. The August consumer data proves to be the start rather than a wobble: merchandise comps go from the full-year +1.9% to negative, fuel volumes fall faster than the 1.0% run-rate, and cents-per-gallon mean-reverts toward 43¢ as crude re-spikes under the energy-shock regime - margin and volume compressing together, which is the one combination the model cannot absorb. Competitive trigger: Wawa, Sheetz and Buc-ee's continue taking foodservice traffic in contested metros while Casey's compounds in the Central US, holding ATD's US comps below +1% and confirming that the switching-cost weakness is real rather than theoretical. Quality trigger: a single point of deterioration in the revenue-trajectory sub-signal takes Business Quality below 65, which moves Medium and Long to HOLD on the framework's own matrix. Financial trigger: Zabka regulatory delay, a raised offer, or a soft first year pushes pro-forma leverage above 3.0x into a 4.6%-plus 10-year, and the multiple de-rates to its five-year median of 16.9x on flat clean earnings of about C$4.60. That is -15.2% from here. Falsification: a September quarter with US comps above +2% and cents-per-gallon above 48¢ kills this scenario outright.
Probability-weighted fair value: C$99.56 - 0.22 x C$116 + 0.55 x C$102 + 0.23 x C$78, about +8.3% above the current C$91.96. Weights sum to 100 with the base case most probable. Note how little of that expected return is re-rating: the base case assumes the multiple stays roughly where it is, and the entire bull case rests on the multiple going to the top of its own five-year range. If you are buying here, you are buying earnings growth, not a cheap price.
Forecast: ENTRY — Technical group: a daily close above the 50-day (C$89.17) on greater than 1.5× volume, or a tested bounce off support.
→ FORECAST: most likely 1–3 September, on the earnings print rather than on drift.
→ BASIS: the volume sub-condition cannot be time-projected — it is event-driven, and the only scheduled event capable of producing 1.5× volume (about 2.3m shares against the 1.51m 20-day average) is Q1 FY2027 on 1 September. The alternative branch, a pullback into the rising 50-day, needs a 3.0% decline from C$91.96 to about C$89.17 — and the 50-day is climbing toward the price at C$1.41 per week, so the gap can close from either side inside roughly two weeks without any news at all. A 52-week-high breakout above C$95.15 on heavy volume is the third path.
→ CONFIDENCE: Moderate. One of the two branches is very likely to resolve by early September; which one determines whether you enter near C$89 or chase near C$95.
ENTRY — Fundamental group: price below C$82.51.
→ FORECAST: Unlikely inside six months absent a bear-case break. C$82.51 is 10.3% below today and below the 50-day; reaching it needs either the bear scenario to start playing out or the warranted multiple to rise, which itself needs the 10-year to fall well below 4.63% or the Staples growth cap to stop binding. What would change it: a September quarter that confirms the consumer roll-over, which would drop the price into the zone — but by then the driver would be deteriorating too, so this is a warning as much as an opportunity.
→ CONFIDENCE: Low.
ENTRY — Catalyst group: post-earnings move above +5% with guidance held and 2× volume.
→ FORECAST: catalyst-dependent — 1 September 2026, 17 days from this report. ATD has beaten on adjusted EPS in recent quarters and the June print produced +11.7% on roughly 3.5× average volume, so the mechanism is proven. Consensus for FY2027 is C$5.029 and may not yet fully reflect first-year Żabka dilution, which cuts both ways: a reset guide could produce a large move in the wrong direction.
→ CONFIDENCE: Moderate.
Ladder reading: 0 of 3 groups met → Wait. This is the framework saying “good business, no entry edge today” — not “bad stock”. The medium and long signals remain BUY; what is missing is a reason to press the button at this particular price.
Forecast: EXIT — Stop-loss: two closes below C$88.00.
→ FORECAST: unlikely in the next 4–6 weeks at the current trajectory, but not remote. C$88.00 is only 4.3% and 2.26 ATR below spot, and the rising 50-day at C$89.17 sits between — so a single disappointing session can put the stop in play in a way it could not a month ago.
→ RISK TRIGGER: Q1 FY2027 on 1 September, 17 days away. The June print moved the stock 11.7% in a day; a move of that size in the other direction clears the stop outright. That is the honest cost of holding through the event.
EXIT — Profit-target: C$101.50 with RSI above 70.
→ FORECAST: Moderate, roughly 3–6 months. Price needs +10.4%, which on the three-month trend of +15.9% is plausible, but the one-month trend is flat and the RSI condition requires a momentum push rather than a grind. The base case reaches this level within twelve months.
EXIT — Thesis invalidation.
→ FORECAST: two quarters minimum to confirm, so the earliest possible date is the December 2026 print. But the consumer half of the driver has already started moving — Michigan sentiment at 51.0 and a softening labour market. One of the two dials is turning. It would be wrong to write that nothing is flashing.
→ CONFIDENCE: Low that it completes; Moderate that the merchandise leg alone deteriorates.
Strongest live trigger: none → action Hold.
What you are risking. The hard stop at C$88.00 is 4.3% below you and only 2.26 ATR away, with the rising 50-day at C$89.17 in between — this is not a stop you can place comfortably far from the noise. The bear case takes you to C$78, a 15.2% drawdown, weighted at 23%. Two entry rules are unmet and both matter: you would be buying 11.4% above the C$82.51 fair-value estimate, and you would be buying 3.4% under a 52-week high on a session that traded 657,900 shares against a 1.51m 20-day average — a breakout nobody is confirming. Over the past month the stock has lagged both the S&P and its own sector. And the framework's own verdict is finely balanced: Business Quality is 65 against a 65 threshold, so a single point of deterioration in the September comps line moves Medium and Long to HOLD.
What you are gaining. Immediate participation in a business compounding adjusted earnings at 14.4% with a return on capital employed of 13.7% and rising, at a multiple the framework calls Fair rather than expensive — 21.30× against a warranted 19.11×, with about 8% of headroom to the sector guardrail. You collect a 0.94% dividend that was raised 10.5% last year and is covered 5.0× by clean earnings, plus a 3.56% free-cash-flow yield working for you while you wait, plus the roughly 3% of the share count management retires annually. You own the Żabka optionality — 13,000 stores at about 10× EBITDA with a guided US$250m of synergies by year three — that consensus may not yet carry, and the EV-charging build-out at 350-plus sites, for nothing.
The read. Waiting materially improves the deal. A pullback into the rising 50-day near C$89 turns a 2.5:1 trade into roughly 4:1 and satisfies the Technical group at the same time; with the 50-day climbing at about C$1.41 a week, that gap closes from one side or the other inside a fortnight. Buying today is not a mistake on a name we rate BUY on both longer horizons — but it is paying full price for a queue position, ahead of a print that will decide whether the quality read holds. That is an assessment, not a recommendation.
What you are giving up. The 10.9% run to the C$102 base case, which is where 55% of the probability sits and where the 17-analyst consensus already is. The 0.94% dividend and its 10.5% annual growth. The Żabka optionality, which you hold for free and which management expects to turn accretive from year two on roughly US$250m of synergies. And you would be selling at 21.30× a business whose warranted multiple is 19.11× — that is 11% above intrinsic on our own anchor, which is a reason to trim, not a reason to be flat.
What you are protecting. The 15.2% path to C$78 if the consumer softening that showed up on 14 August continues, and the leverage step-up to roughly 3.0× lands into a 4.6%-plus 10-year. You would sidestep the binary risk of the 1 September print, which is also the print that tests a Business-Quality score sitting 0.3 of a point above its threshold. But the mechanical check is unambiguous: zero of three exit triggers are live. Price is 4.5% above the stop, RSI is 56.3 not above 70, price is 9.4% below the profit-target level, and not one thesis-invalidation condition holds — fuel margin is at a record 52.44¢ and full-year US comps are +1.9%.
The read. There is no mechanical reason to sell. This is a hold-and-accumulate zone for existing holders, with the accumulation done on weakness toward C$89 rather than into strength at C$95. If you already own it, the framework's answer is to keep it and let the entry rules tell you when to add.
Position sizing not computed — specify your portfolio allocation and role for sizing guidance.
{
"ticker": "ATD.TO",
"company": "Alimentation Couche-Tard Inc.",
"brand": "Circle K",
"currency": "CAD",
"date": "2026-08-15",
"version": "v6",
"exchange": "TSX",
"exchange_ticker": "TSX:ATD",
"isin": "CA01626P1484",
"api_ticker": "ATD.TO",
"sector": "Consumer Staples",
"gics_sector": "Consumer Staples",
"price_at_rating": 91.96,
"price_asof_note": "Friday 2026-08-14 close; report written Saturday 2026-08-15 with the TSX closed",
"signal_short": "HOLD",
"signal_medium": "BUY",
"signal_long": "BUY",
"primary_signal": "BUY",
"short_hold_reason": "technical_pending",
"quality_score": 65,
"valuation_score": 59,
"timing_score": 64,
"driver_score": 62,
"quality_score_derivation": "universal sub-signals 62.75 x0.40 + moat 58 x0.20 + ROIC/capital block 80.8 x0.22 + industry benchmark 60 x0.18 = 65.28 -> 65; clears the High threshold of 65 by 0.28",
"quality_score_margin_to_high_band": 0.28,
"horizon_composite_short": 63,
"horizon_composite_medium": 63,
"horizon_composite_long": 63,
"lifecycle_stage": "mature acquisitive compounder",
"quality_detail": {
"universal_subsignals": {
"revenue_trajectory": 54,
"profitability_vs_peers": 75,
"cash_generation": 62,
"balance_sheet_health": 60,
"average": 62.75
},
"industry_benchmark_name": "Retail: same-store sales + capital efficiency",
"industry_benchmark_value": "FY2026 same-store merchandise US +1.9%, Europe +1.4%, Canada +2.3%; merchandise GM 35.2%; FY2026 same-store fuel volumes US -1.0%, Europe -2.2%, Canada +2.5%",
"industry_benchmark_score": 60,
"moat_score": 58,
"moat_detail": {
"pricing_power": 68,
"network_effects": 50,
"switching_costs": 40,
"cost_advantage": 72,
"intangible_assets": 62
},
"roic_percentile_vs_peers": 78,
"roce_reported_pct": 13.7,
"roic_score": 82,
"roic_score_note": "78th percentile vs peers = top quartile -> the 80-100 band, plus the rising-ROIC bonus (13.7% from 12.2%, third consecutive year) -> 82. The percentile and the sub-score are different numbers; the block arithmetic uses the sub-score.",
"capital_allocation": 82,
"management_skin_in_game": 78,
"management_skin_in_game_basis": "Rubric factors only: insider ownership (Bouchard 13.5%, founding group multiple-voting shares), SBC (modest for retail) and share count (falling - 30.0m retired in FY2026). NO verified net insider buying, which is what holds it below the 80-100 band. Deal record is scored under capital_allocation and is deliberately not double-counted here.",
"roic_block_score": 80.8,
"roic_block_derivation": "roic_score 82 x0.40 + capital_allocation 82 x0.30 + management_skin_in_game 78 x0.30 = 80.8",
"inventory_turns": null,
"inventory_turns_note": "not computed - get_income_statement returned no balance sheet this run (logged in section 15); the industry benchmark is scored on comps + merchandise margin only"
},
"valuation_detail": {
"fcf_yield": 3.56,
"fcf_yield_basis": "C$3.28bn FCF / ~C$92.2bn EV (mktcap C$84.42bn + borrowings-less-cash net debt US$5.55bn at 1.39271)",
"implied_growth_rate": 8.0,
"consensus_growth_rate": 16.48,
"historical_valuation_decile": 8,
"historical_valuation_decile_note": "reported 19.61x = 71st pct of the 13.5x-22.1x 5-yr range (decile 8); the clean 21.30x sits at the 91st pct (decile 10)",
"sector_median_note": "forward P/E 18.29x vs CASY 35.8x and MUSA 18.6x forward; S&P Consumer Staples ~20-21x",
"eps_reported_fy26_usd": 3.37,
"eps_adjusted_fy26_usd": 3.1,
"usd_cad_rate": 1.39271,
"usd_cad_asof": "2026-08-14 close (Yahoo CADUSD=X 0.718025); validated - US$3.37 x 1.39271 = C$4.693, and C$91.96/C$4.69 = 19.61x reproduces the provider trailing P/E",
"revenue_fy26_usd_m": 76506.6,
"revenue_fy25_usd_m": 72856.8,
"revenue_growth_fy26_pct": 5.0
},
"usd_cad_rate": 1.39271,
"usd_cad_asof": "2026-08-14",
"usd_cad_rate_asof": "2026-08-14",
"reporting_currency": "USD",
"rate_units": "discount_rate_r, risk_free_10y, g_near and g_term are all stored as FRACTIONS (0.0913 = 9.13%). r reconciles: 4.63% risk-free + 4.50% ERP + 0.00% add-on (Quality 65 >= 65) = 9.13%.",
"eps_trailing": 4.69,
"trailing_pe": 19.61,
"forward_eps": 5.029,
"forward_pe": 18.29,
"warranted_multiple": 19.11,
"actual_multiple": 21.3,
"val_multiple_basis": "clean (adjusted) P/E, CAD",
"discount_rate_r": 0.0913,
"risk_free_10y": 0.0463,
"risk_free_10y_source": "FRED DGS10 print for 2026-08-13, pulled this run via get_key_economic_indicators - NOT the macro report of 2026-08-12, which carries 4.70%. Sensitivity: at 4.70% warranted = 18.89x and ratio = 1.13, still the Fair band, no signal change.",
"g_near": 0.06,
"g_term": 0.03,
"warranted_ratio": 1.114,
"val_band": "fair",
"sector_guardrail_line": 23.0,
"sector_guardrail_breached": false,
"timing_detail": {
"mtf_confluence": 78,
"risk_reward_score": 42,
"relative_strength_vs_spy": -1.7,
"relative_strength_vs_sector": -1.6,
"relative_strength_vs_spy_3m": 12.2,
"relative_strength_vs_sector_3m": 14.6,
"relative_strength_vs_xst_1m": 3.1,
"relative_strength_vs_xst_3m": 10.2,
"relative_strength_note": "single common anchor to the 2026-08-14 close: 1-month = 2026-07-14 (ATD +1.58%, SPY +3.26%, XLP +3.20%, XST -1.54%); 3-month = 2026-05-14 (ATD +15.94%, SPY +3.77%, XLP +1.31%, XST +5.78%)",
"catalyst_clustering_score": 55,
"dynamic_macro_weight": 0.15,
"sma50": 89.17,
"sma200": 79.83,
"atr_daily": 1.75,
"rsi_daily": 56.3,
"last_session_volume": 657900,
"avg_volume_20d": 1513565,
"volume_ratio_20d": 0.43,
"range_52w": "68.30-95.15",
"range_position_pct": 88,
"days_to_earnings": 17,
"timing_derivation": "78x0.30 + 42x0.20 + 62x0.15 + 74x0.18 + 55x0.17 = 63.8 -> 64"
},
"relative_strength_vs_spy": -1.7,
"relative_strength_vs_sector": -1.6,
"driver_commodity_trend": "WTI CL=F front-month US$82.40 (2026-08-14 close), ABOVE a FALLING 50-DMA US$79.55 (slope -6.8% over 20 sessions), 200-DMA US$76.84; momentum 4wk -0.1%, 6wk +20.0%, 13wk -19.4%; 47th pct of the US$55.27-112.95 52-wk range. INVERSE exposure: ATD is a fuel RETAILER, so a flat-to-falling wholesale trend EXPANDS cents-per-gallon. No Step-2b producer cap applies; the flat/negative 4-week window is read as neutral-to-favourable for margin and negative for volumes. Levels quoted to the future, not an ETF proxy; raw closes, auto_adjust=False.",
"driver_detail": {
"fuel_margin_driver": 72,
"consumer_driver": 46,
"weights": "0.60 fuel margin / 0.40 consumer",
"per_horizon": {
"short": 56,
"medium": 62,
"long": 66
}
},
"fuel_margin_us_cpg_q4fy26": 52.44,
"fuel_margin_us_cpg_q4fy25": 43.27,
"fuel_margin_us_cpg_fy26": 47.49,
"same_store_merch_us_pct": 1.9,
"same_store_merch_europe_pct": 1.4,
"same_store_merch_canada_pct": 2.3,
"same_store_merch_period": "FY2026 (52 weeks ended 2026-04-26)",
"same_store_merch_consolidated_pct": null,
"same_store_merch_consolidated_note": "FY2026 consolidated same-store merchandise was not separately disclosed in the sources checked (company release of 2026-06-22 and its mirrors); the three FY regional figures are +1.9% / +1.4% / +2.3%. The +2.2% consolidated figure that appears in prior reports is the Q4 FY2026 number, not the full year.",
"same_store_fuel_volume_us_pct": -1.0,
"same_store_fuel_volume_europe_pct": -2.2,
"same_store_fuel_volume_canada_pct": 2.5,
"q4_same_store_merch": {
"us": 3.4,
"europe": 1.1,
"canada": -0.9,
"consolidated": 2.2
},
"q4_same_store_fuel_volume": {
"us": -2.1,
"europe": -4.4,
"canada": 2.0
},
"short_entry_confirmed": false,
"short_cap_reason": "Short base signal is BUY (Quality 65 High / Valuation 59 Fair / Timing 64 Improving), but neither the Technical nor the Catalyst entry group is met - no fresh 50-DMA reclaim on >1.5x volume (the 14 Aug session traded 657,900 shares against a 1.51m 20-day average, 0.43x), no pullback-to-support test, and no live post-earnings move. Capped to HOLD: buy on a reclaim above C$95.15 on heavy volume, or on a pullback into the rising 50-DMA near C$89.",
"economic_alignment_stance": "Trend-Following",
"economic_alignment_conviction": 52,
"economic_alignment_pressure": "Tailwind",
"economic_alignment_source": "sector-map",
"economic_alignment_pressure_by_horizon": {
"short": "Neutral",
"medium": "Tailwind",
"long": "Neutral"
},
"amplification_applied": false,
"amplification_blocked_reason": "NO horizon qualifies for Stage-2 amplification. Short: driver 56 < 65 and pressure Neutral. Medium: pressure IS Tailwind but driver 62 < 65. Long: driver 66 >= 65 BUT the XLP long-horizon row is Neutral, not Tailwind, so the AND condition fails. The top-level economic_alignment_pressure field is the MEDIUM-horizon anchor per the framework and must NOT be applied to the long horizon - use economic_alignment_pressure_by_horizon for any per-horizon test.",
"macro_report_date": "2026-08-12",
"overall_confidence": 62,
"quality_confidence": 62,
"valuation_confidence": 70,
"timing_confidence": 64,
"nonop_pct_of_net_income": 7.8,
"clean_pe": 21.3,
"clean_peg": 1.29,
"nonop_detail": "FY2026 reported diluted EPS US$3.37 vs adjusted US$3.10; the gap is chiefly a US$260.9m pre-tax payment-card interchange litigation recovery, plus a US$5.9m FX gain less US$3.3m acquisition costs. Below the 15% normalisation threshold, but every multiple is scored on the clean US$3.10 regardless.",
"competitive_share_trajectory": "stable",
"competitive_threat_level": "elevated",
"competitive_detail": "Gaining on the leader, losing to the specialists - which nets to stable. 7-Eleven's US store count FELL 12,601 -> 12,414 while Circle K's grew 5,833 -> 6,038 against a US universe of 151,975 stores; Casey's (2,899 stores) compounds faster off a smaller base; Wawa/Sheetz/Kwik Trip/Buc-ee's take foodservice traffic in contested metros. EV transition is a slow structural drag (FY26 same-store fuel volumes US -1.0%).",
"fair_value_est": 82.51,
"fair_value_forward_anchored": 96.12,
"stop_loss": 88.0,
"target_price": 102.0,
"analyst_consensus_target": 101.52,
"analyst_target_high": 109.74,
"analyst_target_low": 87.92,
"analyst_target_upside_pct": 10.4,
"analyst_grades_consensus": "buy",
"analyst_bullish_pct": 72,
"analyst_coverage_count": 17,
"fmp_rating": "A-",
"fmp_overall_score": 4,
"recent_upgrades_30d": 0,
"recent_downgrades_30d": 0,
"recent_target_raises_30d": 3,
"zabka_synergies_usd_m": 250,
"zabka_detail": "PLN 32.00/share, ~US$8.6bn equity value, fully debt-financed; pro-forma leverage ~3.0x at close vs 1.99:1 today; ~US$250m of cost and revenue synergies fully achieved by year 3 and a double-digit ROIC by year 3 (company release 2026-07-31); EPS dilutive in year 1, accretive from year 2; tender expected to open ~2026-08-26 for an initial 30 days, completion by December 2026 at the latest.",
"scenario_base_target": 102,
"scenario_bull_target": 116,
"scenario_bear_target": 78,
"scenario_prob_bull": 22,
"scenario_prob_base": 55,
"scenario_prob_bear": 23,
"scenario_weighted_fair_value": 99.56,
"entry_groups_met": 0,
"entry_conviction": "Wait",
"exit_groups_live": 0,
"exit_action": "Hold",
"hard_gate_state": "caution",
"gates_triggered": [],
"gates_caution": [
"Gate 4 - earnings quality: FY26 reported EPS flattered by a US$260.9m pre-tax interchange-litigation recovery (7.8% of net income); all multiples scored on adjusted EPS",
"Gate 5 - regulatory/binary: the US$8.6bn Zabka acquisition is conditional on EC/UOKiK merger clearance, Romanian FDI screening, EU Foreign Subsidies Regulation clearance and a successful tender; ATD is the ACQUIRER not a target, so the pending-takeover special situation does not apply",
"Leverage watch: pro-forma net debt / adjusted EBITDA rises from the disclosed 1.99:1 to ~3.0x at Zabka close (still below the 4x Do-Not-Buy arm)",
"Business Quality 65 clears the High band by only 0.28 of a point; a one-point fall in any sub-signal moves Medium and Long from BUY to HOLD"
],
"do_not_buy_triggers": [],
"systemic_tail_inherited": false,
"systemic_tail_note": "The macro report of 2026-08-12 still carries the S&P 500 concentration / AI earnings-quality unwind as ARMED with its trigger receding. ATD is deliberately NOT treated as cohort: Consumer Staples convenience retail, beta 0.74, 21.3x clean P/E, no AI capex or monetisation leverage, no non-operating investment gains inflating earnings. No cohort de-rating leg added to the section 11 bear.",
"user_horizon": null,
"user_allocation_pct": null,
"portfolio_role": null,
"next_update_date": "2026-08-27",
"next_update_basis": "Zabka voluntary tender expected to open ~2026-08-26, +1 trading day; Q1-FY27 earnings 2026-09-01 falls 17 days out, outside the 14-day window (the default +14d would land Sat 2026-08-29, rolling to 2026-08-31)",
"analysis_status": "on-going",
"finder_ticker": "ATD.TO",
"finder_exchange": "\ud83c\udde8\ud83c\udde6 TSX",
"audit_corrections_20260815_round2": [
"MAJOR: the published Quality derivation carried a stray '68' where the multiplicand belongs (68 x 0.40 = 27.2, not 25.10). The computation was right; the printed equation was not. Now reads: universal sub-signals 62.75 x 0.40 = 25.10.",
"MAJOR: the sensitivity claim 'a single point off any sub-signal flips both horizons to HOLD' was false. Per-point sensitivities are moat 0.20, benchmark 0.18, revenue 0.10; breaching 65 takes ~1.4 / ~1.5 / ~2.8 points respectively. Corrected in section 3.",
"MINOR: management_skin_in_game 78 re-grounded on the actual rubric (ownership, SBC, share count, and the ABSENT verified net buying that keeps it under 80). The deal-record justification was double-counting capital_allocation 82 and is deleted.",
"MINOR: 'recomputed on the same weights' reworded - the prior run published no weights. Weight provenance now disclosed: only the 0.18 benchmark weight is framework-pinned (SKILL 15-20%); the other three are analyst judgement, and this weighting is the LESS favourable of the two candidates (margin 0.28 vs 0.53).",
"MINOR: added roic_score 82 - the block arithmetic uses the return-on-capital SUB-SCORE, not the 78th percentile. The +0.75pt bridge item is now split ~+0.40 management / ~+0.35 return-on-capital treatment.",
"MINOR: added economic_alignment_pressure_by_horizon and amplification_blocked_reason so a machine applying Stage 2 cannot pair the long-horizon driver of 66 with the medium-horizon Tailwind and derive a STRONG BUY the prose correctly blocks.",
"MINOR: moat stated as 58.4 rounded down to 58 (58.4 would give Quality 65.36); fair_value_est 82.52 -> 82.51 (19.11 x 4.3174); the provider trailing P/E is 19.57x, so section 15 now says our 19.61x agrees to within rounding rather than asserting identity."
],
"audit_corrections_20260815": [
"BLOCKER: same-store merchandise and fuel-volume figures were labelled FY2026 but were Q4 FY2026; corrected to the FY figures (merch US +1.9% / Europe +1.4% / Canada +2.3%), which reverses the regional story - Canada was the STRONGEST region on the year, not the weakest.",
"BLOCKER: FY2026 revenue growth corrected from +10.5% to +5.0% (US$76,506.6m vs US$72,856.8m).",
"Quality re-derived on corrected figures: 68 -> 65 (revenue trajectory 65->54, industry benchmark 68->60, management 72->78). Clears the High threshold by 0.28.",
"USD/CAD corrected 1.3870 -> 1.39271 (CADUSD=X 0.718025 at the 2026-08-14 close); every derived figure re-run.",
"Alex Miller has been CEO since 2024-09-06 (~23 months), not ~11; the Seven & i walk-away was on his watch, so management_skin_in_game raised 72 -> 78.",
"Zabka synergies are quantified by management at ~US$250m by year 3 - not 'unquantified'; the +3 optionality tilt is re-justified against the disclosed figure rather than raised.",
"Relative strength recomputed on a single common anchor: 1-month sector relative is -1.6pp (was overstated at +3.0pp by a mixed-anchor calculation); risk_reward marked 45 -> 42 accordingly.",
"Horizon composites recomputed on the framework weightings (short 55/25/20, medium 35/35/30, long 55/30/15) = 63/63/63.",
"Driver 2 Current raised 32 -> 45: the July retail-sales miss was concentrated in nonstore (-2.2%), attributed to a Prime Day calendar shift; driver 59 -> 62, still Neutral.",
"Risk-free provenance corrected: 4.63% is the FRED DGS10 print of 2026-08-13, not the macro report's figure (4.70%); sensitivity disclosed.",
"Minor corrections: last-session volume 657,900 and a true 20-day average of 1,513,565 (0.43x) replace a mislabelled 3-month average; curve 48bp not 51bp; XST 3-month relative +10.2pp; trailing P/E stated once at 19.61x; 17 days to earnings; 50-DMA convergence C$1.41/week; US c-store count 151,975; dividend cover 5.0x on clean EPS; 7-Eleven US store count is FALLING while Circle K's grows."
],
"data_as_of": {
"price": "2026-08-14",
"fx": "2026-08-14",
"macro_report": "2026-08-12",
"fundamentals": "2026-04-26 (FY2026 year end, reported 2026-06-22)",
"analyst_targets": "2026-08-14",
"crude": "2026-08-14"
}
}
Three numbers decide this report. The clean multiple of 21.30x against a warranted 19.11x, which keeps valuation Fair. The 23.0x Consumer Staples guardrail it does not breach. And Business Quality at 65.28 against a 65 threshold - the thinnest of the three margins, and the one the 1 September quarter will test.