Pets at Home Group (PETS)

Sector:

Retailers

Index:

FTSE 250

268.40p
   
  • Change Today:
    -1.60p
  • 52 Week High: 397.60
  • 52 Week Low: 254.40
  • Currency: UK Pounds
  • Shares Issued: 467.91m
  • Volume: 970,965
  • Market Cap: £1,255.87m

RBC Capital Markets downgrades Pets at Home, shares slide

By Michele Maatouk

Date: Monday 04 Jul 2022

LONDON (ShareCast) - (Sharecast News) - Pets at Home tumbled on Monday as RBC Capital Markets downgraded the shares to 'underperform' from 'sector perform' and slashed the price target to 280p from 330p, partly on valuation grounds.
The bank said PETS has a strong position as a specialist player in the UK pet care market. "However, we believe valuation looks full and consensus forecasts look demanding.

"We expect further earnings growth to be more challenging to achieve given mounting pressures on the consumer and a wider spend rotation away from 'pandemic-winning' categories. Hence, we downgrade to underperform."

RBC said current consensus is looking for circa 2% earnings per share growth in FY23, with a further 12% growth in FY24. "Even with investments coming down in FY24 and PETS' more defensive offering, we think that this looks challenging to achieve, given pressured consumer budgets and margin headwinds," it said.

It noted the shares currently trade at around 15x CY23 estimated price-to-earnings, towards the middle of the historic range.

"We note that this is at a premium to others in the UK retail space, and looks demanding for a retailer with 100% UK exposure, at a time when consumer spending is under pressure," RBC said. "We have more valuation upside for some other UK retailers at these levels, such as JD Sports and WH Smith."

RBC said the company has benefited over the last two years from its market leading position in a sector that has seen strong growth. According to data from Statista, 62% of UK households now own a pet, compared to around 40% before the -pandemic, it said.

"Whilst we think that the defensive nature of pet care should provide PETS with some topline resilience, we think that further growth will now be more difficult to achieve in the light of rising cost of living and the benefits from higher spend on new pets fading away."

At 0817 BST, the shares were down 6.4% at 290.20p.

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Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

 

PETS Market Data

Currency UK Pounds
Share Price 268.40p
Change Today -1.60p
% Change -0.59 %
52 Week High 397.60
52 Week Low 254.40
Volume 970,965
Shares Issued 467.91m
Market Cap £1,255.87m

PETS Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
47.88% below the market average47.88% below the market average47.88% below the market average47.88% below the market average47.88% below the market average
57.89% below the sector average57.89% below the sector average57.89% below the sector average57.89% below the sector average57.89% below the sector average
Price Trend
50.86% below the market average50.86% below the market average50.86% below the market average50.86% below the market average50.86% below the market average
51.22% below the sector average51.22% below the sector average51.22% below the sector average51.22% below the sector average51.22% below the sector average
Income
47.29% above the market average47.29% above the market average47.29% above the market average47.29% above the market average47.29% above the market average
Sector averageSector averageSector averageSector averageSector average
Growth
11.84% below the market average11.84% below the market average11.84% below the market average11.84% below the market average11.84% below the market average
15.00% above the sector average15.00% above the sector average15.00% above the sector average15.00% above the sector average15.00% above the sector average

What The Brokers Say

Strong Buy 3
Buy 3
Neutral 3
Sell 1
Strong Sell 0
Total 10
buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

PETS Dividends

  Latest Previous
  Interim Final
Ex-Div 07-Dec-23 15-Jun-23
Paid 12-Jan-24 11-Jul-23
Amount 4.50p 8.30p

Trades for 28-Mar-2024

Time Volume / Share Price
16:35 668,019 @ 268.40p
16:35 954 @ 268.40p
16:35 1,123 @ 268.40p
16:35 540 @ 268.40p
16:35 1,830 @ 268.40p

PETS Key Personnel

CEO Lyssa McGowan

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