Canaccord Genuity cuts Pets at Home target price but keeps at 'buy'

(Sharecast News) - Canaccord Genuity has trimmed its target price for Pets at Home following last week's abrupt departure of its CEO and cut to full-year guidance, but has kept a 'buy' rating on the stock.. Pets at Home shares tanked on Thursday after the retailer and vets chain announced the immediate exit off CEO Lyssa McGowan after three years, coinciding with the company's second profit warning in as many months.

"Whilst disappointing to have to revise estimates again in such short order, it is another reminder that the UK consumer backdrop remains challenging. That said, management had hoped to outperform the market," Canaccord Genuity said.

However, the broker added: "The business is far from broken, and we continue to believe that investment (DC infrastructure and digital platform) made in recent years provides a strong platform for PETS to outperform and the Group is well-placed to benefit as and when the UK macro backdrop improves, albeit now with a new CEO leading the Group. We expect the Group will look for a new CEO with experience in retail turnaround situations."

With the company now guiding to adjusted pre-tax profits of £90m-100m for the year to end-March, down from £110m-120m previously, Canaccord Genuity has cut its estimates and lowered its target price for the shares from 285p to 245p.

However, the broker pointed out that the stock is trading at just 13.2 times FY26 earnings, falling to 12.6x on FY27 earnings - well below the 10-year average of 15x.

The stock was 2.5% higher at 197.6p by 1243 BST.