(Sharecast News) - Shares in Pets at Home were pulling back on Thursday after surging the previous session as markets welcomed the pet products and veterinary group's full-year results, with broker Canaccord Genuity reiterating its 'buy' rating on the stock.
Full-year results were in line with expectations and company guidance, with strong growth in the vet side of the business offset by a weaker retail performance.
However, what was more positive were signs of early momentum building in PAH's retail turnaround, according to Canaccord Genuity.
"We take encouragement that the Retail turnaround plan announced last November has delivered early signs of progress, with improved volume trends, stronger customer metrics and sequential sales improvement in H2 following price investment and execution initiatives," the broker said.
"Product availability, value perception and customer satisfaction have all improved, with the benefits of new ranges set to come later this year."
Canaccord Genuity said the stock trades at FY27 price-to-earnings ratio of 11.8x, falling to 10.5 on FY28 estimates, with a FY27 dividend yield of 4.3%.
"We are encouraged by the early traction in the Retail turnaround plan and believe delivery from initiatives to restore Retail profitability remains a key tenet of the investment case," the broker said.
The broker maintained a 245p target price for the shares, which were down 1.8% at 193.6p by 1121 BST after a 6.5% jump the previous session.