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Pet Valu (TSX:PET) Valuation Check After New Premium Pet Food Partnership Expansion

Simply Wall St · 2d ago

Pet Valu Holdings (TSX:PET) is leaning into the premium pet food trend, teaming up with Natural Pet Food Group to roll out K9 Natural and Feline Natural across its Canadian store network.

See our latest analysis for Pet Valu Holdings.

The move comes after a bumpy stretch for the stock, with a 90 day share price return of minus 23.32 percent but a stronger year to date share price return of 14.66 percent and a 1 year total shareholder return of 18.79 percent. This suggests momentum may be rebuilding as investors respond to its growth and loyalty strategy at around 29.10 dollars per share.

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With earnings still growing, the share price well below analyst targets, and a clear tilt toward premium, loyalty driven spending, is Pet Valu quietly undervalued here, or is the market already baking in its next leg of growth?

Most Popular Narrative Narrative: 25.2% Undervalued

With Pet Valu trading at CA$29.10 against a narrative fair value near CA$38.91, the story leans toward upside if the growth path holds.

The rapid rollout and enhancement of Pet Valu's premium culinary pet food experience taps into ongoing growth in pet humanization and premiumization, enabling higher spending by affluent, frequent in store customers and supporting sustained revenue and margin expansion.

Read the complete narrative.

Curious how steady revenue growth, rising margins, and a lower future earnings multiple can still point to upside from here? The full narrative explains the math behind that disconnect.

Result: Fair Value of $38.91 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, sustained margin expansion is not guaranteed if Canadian demand slows or if digital rivals win share more quickly, which could pressure same store sales and profitability.

Find out about the key risks to this Pet Valu Holdings narrative.

Build Your Own Pet Valu Holdings Narrative

If you see the story differently or want to stress test the assumptions with your own inputs, you can quickly craft a personalized narrative in under three minutes: Do it your way.

A great starting point for your Pet Valu Holdings research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.

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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.