Deutsche Bank lowers target price on Pets At Home

Deutsche Bank said Pets At Home's full-year results reflected "a strong end to the year", with sales and pre-tax profits both ahead of expectations.

The German bank stated Pets At Home continued to be "well placed" to take advantage of structural growth in the UK pet care sector, with strong existing market share and planned investment into enhancing the customer proposition through the new DC and Polestar initiatives.

DB also noted that the opportunity to increase the share of wallet from its significant VIP customer base of 7.3m active users remained "attractive", with subscriptions, the price architecture, and digital enhancements "a viable means of achieving this".

"The impact of inflation on consumer spending remains limited so far, with the businesses' more affluent customer base likely to be supported by Covid savings and the private label offer giving a further avenue to retain customer spend (although we see a risk to higher-margin non-discretionary accessories)," added the analysts.

Reporting by Iain Gilbert at Sharecast.com