VCA Antech (WOOF) Margin Expansion Story Still Unfolding, Piper Jaffray Says

Piper Jaffray analyst Kevin Ellich reiterated an Overweight rating and $60 price target on VCA Antech (NASDAQ: WOOF) saying they remain buyers of the stock as the margin expansion story is still unfolding.

Ellich commented, "WOOF's adjusted operating income margin is still ~300 bps lower than peak margins in the mid-2000's. Given the improving SS animal hospital growth over the last few quarters, we believe the margin expansion story is playing out, albeit a little slower than some expected. As SS growth continues to improve, WOOF should be able to drive margin expansion to ~17%, in our view, and we estimate every 100 bps of margin expansion equates to about $0.16 to $0.17 of EPS. We also believe VCA's reference lab is performing well and is slowly gaining market share with help from distributors."

For an analyst ratings summary and ratings history on VCA Antech click here. For more ratings news on VCA Antech click here.

Shares of VCA Antech closed at $52.53 yesterday.

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