Pet Valu Holdings Ltd. (TSE:PET) Just Reported And Analysts Have Been Lifting Their Price Targets

It's been a good week for Pet Valu Holdings Ltd. (TSE:PET) shareholders, because the company has just released its latest quarterly results, and the shares gained 8.3% to CA$36.30. Results were roughly in line with estimates, with revenues of CA$281m and statutory earnings per share of CA$1.21. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the consensus forecast from Pet Valu Holdings' nine analysts is for revenues of CA$1.19b in 2025. This reflects an okay 5.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 2.0% to CA$1.43. Before this earnings report, the analysts had been forecasting revenues of CA$1.18b and earnings per share (EPS) of CA$1.40 in 2025. So the consensus seems to have become somewhat more optimistic on Pet Valu Holdings' earnings potential following these results.

View our latest analysis for Pet Valu Holdings

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 15% to CA$41.45. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Pet Valu Holdings, with the most bullish analyst valuing it at CA$45.00 and the most bearish at CA$40.00 per share. This is a very narrow spread of estimates, implying either that Pet Valu Holdings is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Pet Valu Holdings' growth to accelerate, with the forecast 11% annualised growth to the end of 2025 ranking favourably alongside historical growth of 7.8% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 10% annually. Pet Valu Holdings is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Pet Valu Holdings following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Pet Valu Holdings analysts - going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Pet Valu Holdings has 1 warning sign we think you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.