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Bullboard - Stock Discussion Forum Pet Valu Holdings Ltd T.PET

Alternate Symbol(s):  PTVLF

Pet Valu Holdings Ltd. is a Canadian specialty retailer of pet food and pet-related supplies. The Company has over 800 corporate-owned or franchised locations across the country. Through its neighborhood stores and digital platform, the Company offers more than 9,000 competitively priced products, including an assortment of premium, super premium and holistic brands. Its family of stores... see more

TSX:PET - Post Discussion

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Post by retiredcf on Jul 26, 2022 11:12am

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Particularly impressive given that NB have downgraded most of the companies within their coverage across multiple sectors. GLTA

National Bank Financial analyst Vishal Shreedhar is “expecting continued momentum” when Pet Valu Holdings Ltd.  reports its second-quarter financial results before the bell on Aug. 9, seeing the Markham, Ont.-based company benefitting from market expansion.

“Management suggested that approximately 3 million pets were adopted during the pandemic (annual spend of $1,000 per dog and $700-$800 per cat),” he said. “According to Statistics Canada, the total pet market (excluding veterinary and other services) increased by $1.339-billion from 2019 to 2021, or about 23 per cent. For reference, over that same time period, PET’s system-wide sales grew by 35 per cent.”

For the quarter, Mr. Shreedhar is projecting revenue of $215-million, exceeding the Street’s forecast of $211-million and up from $182-million a year ago. His earnings per share estimate is 33 cents, a penny above the consensus and up 21 cents year-over-year.

The analyst also sees the possibility for further increases to the company’s full-year guidance after a raise following the release of first-quarter results.

“It expects revenue between $870-million and $895-million (NBF estimate is $896-million; consensus is $889-million), supported by same-store sales growth of 9 per cent to 12 per cent (NBF is 11.8 per cent), 35 to 45 new stores openings (NBF reflects 42) and EBITDA between $191-million and $198-million (NBF is $201-million; cons. is $197-million,” he said. “EPS is expected to be between $1.37 and $1.44 (NBF is $1.46; cons. is $1.44). Last quarter, management indicated it was seeing continued momentum into Q2. We wouldn’t be surprised if PET upwardly revises guidance when it provides an update given continued momentum and a history of conservative outlook commentary.”

After raising his full-year revenue and earnings expectations for both 2022 and 2023, Mr. Shreedhar bumped up his target for Pet Valu shares by $1 to $39. The average on the Street is $41.14.

“We value Pet Valu at 14.0 times our 2023/24 EBITDA. While we have a favourable view of PET’s business model, its outlook, and the industry, these positive attributes are adequately reflected in valuation,” he said.

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