Pets at Home Group PLC (LON:PETS) was downgraded to ‘hold’ from ‘buy’ by Shore Capital as the broker sees uncertainty in the short term.
The target price remained 311p after shares rallied 21% on Friday following a trading update where the pet products retailer posted a 12% jump in sales in the eight weeks to July 16 recouping a 13.5% decline in the two months prior.
READ: Pets at Home expects continued high costs during pandemic but sales recover in weeks as non-essential services restart
Post-lockdown trading is starting to recover, groom rooms back open and vet surgeries starting to see growth again, but analysts noted that the short term is clouded by increased operating costs to cope with social distancing rules, uncertainty of a second lockdown in the UK and macro-economic headwinds.
“Given the uncertain outlook we do not think there will be material upgrades to forecasts in the short term and believe that the shares now look up with events,” ShoreCap commented.
“Over the long term we believe that the company is winning market share and like the fact that its strategy mixes products and services.”
Shares lost 3% to 302.2p on Monday late morning.