Broker downgrades Pets at Home stock from ‘buy’ to ‘hold’

Analysts at Shore Capital have downgraded its recommendation of Pets at Home stock from buy to hold, according to reports from The Times.

This is as a result of uncertainties around the business especially in regards issues at its new distribution centre and the competition regulator’s review of the veterinary services market.

The company witnessed issues at its new distribution centre in Q2 and analysts said that has heightened uncertainty surrounding annual profits, adding pressure on the second half to deliver more than 55% of the annual profit.

Pets at Home management said teething problems at the distribution centre resulted in lower product availability from August to mid-September, suppressing like-for-like growth.

The retailer’s share price has dropped 20% since the beginning of the CMA probe but it remains confident in its business model.

At the time of writing, Pets at Home’s share price had dropped 2.96% to 282.40p per share.