RBC Capital initiates coverage of Pets at Home, Halfords
RBC Capital Markets initiated coverage of Pets at Home and Halfords on Tuesday, arguing that the former has a fairly full valuation, while the latter is "shifting up a gear".
The bank started Pets at ‘sector perform’ with a 450p price target, noting that it’s the UK’s leading specialist pet care business, with a share of around 24% of the UK pet care market.
"Whilst we think that PETS is a well-run company with a pragmatic c and achievable strategy, we think growth rates will likely moderate going forward," it said. "The shares have had a strong run over the last year and valuation prevents us from being more positive."
RBC started Halfords at ‘outperform’ with a 450p price target.
"Halfords is a leader in the UK motoring and cycling retail and services markets, and also has exposure to the more fragmented but growing autocentres market," it said. "We see opportunity for market share gains from its growing Autoservices business and expect that its more integrated strategy should help to sustain some of the topline gains it has seen over the course of the pandemic."