Morningstar

Loblaw: We See Per Bank as a Strong CEO Hire, Given His Vast Industry Experience

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Securities In This Article
Loblaw Companies Ltd
(L)

No-moat Loblaw’s L search for its future CEO has concluded with the hiring of Per Bank, who will take the helm by early 2024. We think Bank is a great fit and don’t expect any dramatic changes to capital allocation, with ongoing investment in growth areas, including connected health, e-commerce, loyalty, and private label. Our sanguine stance is supported by Bank’s experience in his current role as CEO at Salling Group, which he has held since 2012. Like Loblaw, Denmark-based Salling is both the leading grocery chain in its home country and family-owned. Further, Salling has been investing beyond traditional grocery, as it has expanded into e-commerce, loyalty, and sustainability.

We have confidence that Loblaw will continue similar investment plans with the hiring of Bank, something we see as prudent. We like its expenditures in digital capabilities, as we believe this helps drive traffic. We also have a favorable view on Loblaw’s moves toward expanding its pharmaceutical practice. From our vantage point, recently acquired Lifemark Health Group and walk-in clinics utilizing excess space within its superstores dovetail well with Loblaw’s existing services in drug retail and should drive further foot traffic. We are maintaining our CAD 106 fair value estimate, leaving shares slightly overvalued. We plan to maintain our Standard capital allocation rating.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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About the Author

Dan Wasiolek

Senior Equity Analyst
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Dan Wasiolek is a senior equity analyst, AM Consumer, for Morningstar*. He covers gaming, lodging, and online travel. Names covered within the gaming industry are Wynn Resorts, Las Vegas Sands, MGM Resorts, Caesars Entertainment, Penn Entertainment, and DraftKings. In the hotel industry Dan covers Marriott, Hilton, InterContinental, Hyatt, Wyndham, Choice, and Accor. Other travel related names under his coverage are Booking Holdings, Expedia, Airbnb, Tripadvisor, Sabre, and Amadeus.

Before joining Morningstar in 2014, Wasiolek spent 16 years as an analyst and portfolio manager covering US mid- and large-cap strategies for Driehaus Capital Management. During the first half of his time at Driehaus, Dan’s responsibilities as an analyst included analyzing and recommending stocks across all sectors and industries for inclusive in the portfolios. Then in the second half of his tenure at Driehaus, Dan was responsible for stock selection and portfolio management of the US mid- and large-cap strategies, as well as co-managing in-house smaller-cap portfolios.

Wasiolek holds a bachelor’s degree in business administration from Illinois Wesleyan University and a master’s degree in business administration, with a concentration in finance, from the DePaul University Kellstadt School of Business.

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

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