Loblaw slips on the week as cost to borrow doubles

Loblaw Companies Limited heads into its November 19 earnings date with the stock under mild pressure and a curious spike in borrowing costs against a backdrop of near-zero short interest.

The most interesting tension this week is not the short position, which is negligible, but the cost to borrow. Borrowing costs have more than doubled over the past week, rising 105% to 1.37%. That is a notable move for a stock where shorts account for less than 0.6% of the free float. The lending market itself remains wide open: availability is essentially uncapped, with shares available to borrow far exceeding anything short sellers have drawn on. The contrast suggests the CTB spike reflects technical or settlement-related activity rather than any genuine increase in bearish conviction. Short interest actually fell 7.8% on the week, to roughly 6.9 million shares, reversing a modest build from earlier in October. There is no squeeze dynamic here, no tight borrow, no crowded trade.

The Street leans constructive but without much urgency. Six analysts carry buy ratings against the stock, with a consensus price target of CAD 70.45, about 2.6% above Thursday's close of CAD 68.67. The ORTEX analyst recommendation factor ranks in the 91st percentile of its universe, meaning few stocks have a more positive analyst skew relative to peers. The dividend score ranks in the 93rd percentile as well, though the dividend data in the snapshot is stale (last recorded in mid-2022), so readers should cross-check the current yield independently. On valuation, the stock trades at roughly 25x trailing earnings and 6.6x book, with the P/E multiple expanding about 3 points over the past month alongside a 9% price gain. EV/EBITDA is running near 12.2x, up modestly on the week. These are not cheap multiples for a grocer, and the EPS forward momentum score sits in only the 28th percentile, meaning the Street is not expecting outsized earnings growth ahead.

Ownership is dominated by Wittington Investments, the Weston family vehicle, which holds 47% of shares. That concentration effectively insulates the company from most activist pressure and constrains the float available to outside investors. Among the next tier of holders, RBC Dominion trimmed its position by roughly 3.5 million shares in the most recent reported period, while BlackRock added around 1.1 million. The insider register for the 90-day period to early September shows a net sell of around 267,000 shares, though the bulk of that reflects an option exercise and same-day sale by an executive in early September rather than any discretionary disposal.

Loblaw fell 2.8% on Friday and lost about 2% on the week, a steeper move than closest peers. George Weston dropped 4.2% on the week and Empire fell 1.7%, suggesting sector-level selling rather than anything company-specific. Metro was the most resilient of the Canadian grocery names, off just 0.8%. On recent earnings history, the last two prints each produced a negative day-one reaction: a move of about -2% after the September 2026 quarter and -0.3% after the July print. The five-day reaction after the July result extended to -4.1%, suggesting the stock has struggled to hold initial post-earnings levels.

The November 19 print is the next focal point: with the stock trading near the analyst consensus target and valuation multiples at the upper end of their recent range, the margin for disappointment looks thin.