Shopper Drug Mart Gets New CFO - Analysts Expect Easy Transition

While the departure of a chief financial officer can often be cause for concern among investors, they need not be worried about the exit of CFO George Halatsis from Shoppers Drug Mart Corp. (SHDMF.PK), analysts say.

Irene Nattel of RBC Capital Markets wrote in a note to clients:

We do not believe that Mr. Halatsis’ imminent departure signals anything ominous with regard to Shoppers’ future. Rather, in our view it is an opportunity for this talented 54-year-old seasoned finance executive to have another ‘kick at the can.’

The executive’s replacement by Brad Lukow, who has been senor vice-president of finance at the retailer for nine years, will probably be as close as it gets in business to a “seamless” transition, added the analyst, who maintained her “top pick-buy” rating and C$54 price target on the shares.

Ryan Balgopal of Scotia Capital also expects an “orderly transition” for Mr. Lukow, who worked in finance and tax at Loblaw Cos. Ltd. (LBLCF.PK) prior to joining Shoppers.

“We do not expect any major changes to the company’s operations or strategy,” he wrote, reiterating his “sector outperform” rating and C$67.50 price target. “We also expect capital discipline to remain strong.”