Upgrade In response to its acquisition of Les Franchises Chico Inc., Stifel’s Martin Landry raised his Pet Valu Holdings Ltd. target to $44 from $42 with a “buy” rating. The average is $40.
“The purchase price was not disclosed, but Chico generated system-wide sales of $79-million, which represent an increase of 8 per cent over Pet Valu’s system-wide sales of roughly $1-billion for 2021,” he said. “We model an EPS accretion of 6 per cent on our 2023 EPS estimate, assuming that Pet Valu will be able to generate wholesale revenues by suppling Chico with most of it merchandise. We view the expansion positively as it provides the company with an incremental vector of growth, given our belief that there is ample growth opportunity for the Chico network in Quebec.”