VCA Antech "strong buy," target price reduced

02/05/08 - CL King

NEW YORK, February 5 (newratings.com) - Analyst Ross Taylor of CL King maintains his "strong buy" rating on VCA Antech Inc (WOOF), while reducing his estimates for the company. The target price has been reduced from $50 to $47.

In a research note published this morning, the analyst mentions that the company has pre-announced its 4Q revenues and EPS short of the previous estimates. VCA Antech posted lower-than-expected internal growth of 9.1% for its reference labs for the quarter, the analyst says. The company has issued its revenue guidance for 2008 at $1.30-$1.33 billion, in-line with the consensus, with the EPS guidance for the year at $1.55-$1.60, short of the consensus. The EPS estimates for 2008 and 2009 have been reduced from $1.62 to $1.57 and from $1.86 to $1.81, respectively, to reflect the reduced animal hospital same-store sales estimate and operating profit margin estimates.