Could a late-day ice cream fix be just what Tim Hortons Inc. (THI) needs?
“We view this move as a strategic and financial positive for Tim Hortons,” analyst Turan Quettawala of Scotia Capital said in a note to clients.
If the test was extended to more standard Canadian stores — there are 2,104 -- it could represent a material financial benefit to the company, he added, and could help drive evening traffic.
[That] is a growth opportunity for Tim Hortons, as only 15% of its [customer visits] are in the evening. This move also provides an additional product suite, which may result in more consumers opting for Tim Hortons as a dinner option, leading to a higher average cheque.
He rates the shares "outperform" with a price target of C$35.