Alimentation Couche-Tard could benefit from a correction in the price of crude oil. Analyst Sara O' Brien of RBC Capital Markets noted the retailer and gad bar owner, due to report first-quarter results on Sept. 2., has seen its share price rise 20% since the fourth quarter, benefiting from an inverse correlation to crude correction. "U.S. gas margins have improved since the first quarter, given the gradual sharp decline in gasoline and crude prices respectively," she wrote in a note to clients. The retailer's low valuation (13 times fiscal 2009 peer share earnings) also makes it a good defensive play with solid upside potential, she said. The company is also well positioned to continue its consolidation of the market, Ms. O'Brien added, with management plans to add 200 to 300 new stores in 2009 and a potential of larger deals with integrated oil companies. She rates Alimentation Couche-Tard shares at outperform with a price target of $14. Hollie Shaw ...
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