Growth of the sector and the merger of large companies attract the attention of investors.
Among the changes in lifestyle and consumption patterns in recent years, as a result of the Covid-19 pandemic, is the increase in the search for the company of pets. The number of pets during the most severe period of the health crisis grew by 30%, according to the Radar Pet 2021 survey, carried out by the Companion Animals Commission (Comac).
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According to the most recent Pet Census from Instituto Pet Brasil (IPB), in the world ranking of countries with the most pets, Brazil occupies third place, behind only the United States and China, with a total of 149.6 million pets. pet. Also according to the survey, the sector recorded revenue of R$67.4 billion in 2023, a growth of 14% compared to the previous year.
The Brazilian Association of the Pet Products Industry (Abinpet) points out that the sector is one of the most promising, and that pet food and snacks are among the best sellers in food retail. Cosmetics, toys and accessories appear next.
In this scenario, shares in the pet sector can be attractive for those looking for good returns and portfolio diversification. However, before investing, it is recommended to follow the guidance of the Brazilian Association of Financial and Capital Market Entities (Anbima) on deepening knowledge about the sector, the economic moment and the companies listed on the Stock Exchange (B3).
Merger of big brands generates movements
According to market information, the largest pet product retailers in Brazil are Petz and Cobasi. The first, owner of 459 stores, generated an annual EBITDA of R$267 million in 2023. The second, with a total of 234 stores, reached the figure of R$197 million.
This financial indicator, despite not being recognized by the accounting practices adopted in Brazil, is used by investors to analyze a company with shares listed on the stock exchange, as it represents cash potential and performance.
In April, the merger between the two companies took another step: the companies signed an agreement, which still depends on the approval of the Administrative Council for Economic Defense (Cade). Together they would total more than R$6.9 billion in revenue.
During the morning of the announcement date, Petz shares (PETZ3) soared on the Stock Exchange (B3), with an increase of 46.86% in negotiations, to go up for auction soon after, thanks to the mechanism activated when there is a very high fluctuation. abrupt. In one day, prices more than doubled, rising from R$3.50 to R$7.10, which implied a valuation of R$3.3 billion.
However, a month after the news, Bank of America (BofA) recommended neutrality regarding the operation and raised the target price of the shares from R$4 to R$4.80, indicating a lower valuation than the merger’s valuation.
Favorable time to invest
After the beginning of the interest rate cut, indicated in August last year, and the projections of economists and market analysts consulted by the Central Bank (BC) about the downward trend in the Selic basic interest rate, B3 began to receive greater attention of those who focused on investing their money in fixed income.
Despite doubts about the merger of major brands, such as Petz and Cobasi, the expansion of the pet sector and the growth in revenue indicate a possibility for those who wish to diversify their investments.
According to a survey carried out this year by fintech Koin , 56.4% of respondents spend more than R$200 monthly on caring for their pets. Concern for the health and well-being of family members drives the animal products market and the gross revenue from these activities, which drives the sector’s growth.
