Dollarama Inc. Just Beat EPS By 17%: Here's What Analysts Think Will Happen Next
Shareholders of Dollarama Inc. (TSE:DOL) will be pleased this week, given that the stock price is up 10% to CA$194 following its latest first-quarter results. It looks like a credible result overall - although revenues of CA$1.5b were in line with what the analysts predicted, Dollarama surprised by delivering a statutory profit of CA$0.98 per share, a notable 17% above expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
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Taking into account the latest results, the consensus forecast from Dollarama's eleven analysts is for revenues of CA$6.78b in 2026. This reflects a reasonable 3.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 4.4% to CA$4.62. Before this earnings report, the analysts had been forecasting revenues of CA$6.75b and earnings per share (EPS) of CA$4.51 in 2026. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
See our latest analysis for Dollarama
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 17% to CA$197. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Dollarama analyst has a price target of CA$223 per share, while the most pessimistic values it at CA$115. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Dollarama's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 5.2% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.1% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Dollarama.
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Dollarama's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Dollarama going out to 2028, and you can see them free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with Dollarama .
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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