Pet Valu Holdings Ltd. (TSE:PET) Just Reported Yearly Earnings: Have Analysts Changed Their Mind On The Stock?

Investors in Pet Valu Holdings Ltd. (TSE:PET) had a good week, as its shares rose 2.1% to close at CA$30.64 following the release of its full-year results. Pet Valu Holdings reported CA$1.1b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of CA$1.24 beat expectations, being 2.5% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Pet Valu Holdings

Taking into account the latest results, the most recent consensus for Pet Valu Holdings from eleven analysts is for revenues of CA$1.13b in 2024. If met, it would imply a credible 6.6% increase on its revenue over the past 12 months. Per-share earnings are expected to increase 3.7% to CA$1.30. In the lead-up to this report, the analysts had been modelling revenues of CA$1.14b and earnings per share (EPS) of CA$1.38 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at CA$36.88, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. Currently, the most bullish analyst values Pet Valu Holdings at CA$42.50 per share, while the most bearish prices it at CA$33.00. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Pet Valu Holdings' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Pet Valu Holdings' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.6% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.5% annually. So it's pretty clear that, while Pet Valu Holdings' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Pet Valu Holdings analysts - going out to 2026, 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.