Analysis: US pet companies’ valuations slide to multi-year lows

Publicly traded companies in the pet sector are trading at lower valuation multiples than in the previous years, according to market data from financial services provider Morningstar.

The trend comes as consumers grapple with rising costs – including pet supplies – while pet ownership rates in the US have largely plateaued.

For instance, data from the American Pet Products Association’s (APPA) 2026 State of the Industry report shows that pet ownership as a percentage of US households remained at 71% in both 2024 and 2025, although cat and dog penetration increased by 2 percentage points (p.p.) during the period.

Given this scenario, analysts argue that some retail and manufacturing companies may be trading below their intrinsic value, meaning the estimated value of their underlying assets and future earnings.

Tractor Supply

American-based retailer Tractor Supply’s valuation is currently lower than in the past two years. 

Data from Morningstar showed that its price-to-earnings (P/E) ratio, measuring the proportion of a company’s share price to its earnings per share (EPS), fell from 25.8 in 2024 to 24.2 in 2025 and is currently 15.4 as of the end of May 2026. 

Even in another valuation metric, the EV/EBITDA ratio (enterprise value relative to earnings before interest, taxes, depreciation and amortization) is lower than in previous years, having gone from 17.5 in 2024 to 16.2 in 2025 and 11.6 this year. 

At the beginning of May, American investment bank Piper Sandler downgraded the company’s stock and cut its price target following concerns about the pressure on its pet segment and what it classified as a weak quarterly report.

During the first quarter of fiscal year (FY) 2026, ending 28 March, Tractor Supply’s net sales increased 3.6% year-over-year (YoY) to $3.6 billion (€3B). However, the metric was negatively impacted by the companion animal division, which reduced comparable sales by 100 basis points.

General Mills 

The Minneapolis food giant has been following a downward valuation trajectory since 2021, when its P/E ratio was 18.6, going to 13.9 in 2024, 10 in 2025, and currently stands at 8.3.

Consumer staples analyst Brendan O’Boyle of Seeking Alpha says the company is “very cheap relative to historical valuations on a variety of metrics,” including the P/E ratio. 

Even when “adjusting for 2026 earnings guidance, it is still near historical lows at 10x,” he adds. EV/EBITDA and price-to-sales metrics also point to a trough-level valuation. Over the past decade, EV/EBITDA peaked at 14.49 in 2016, then gradually declined to 8.51 in 2025 and to 7.63 currently.

The share price of the consumer goods manufacturer has been falling throughout 2026, having started the year at $46.50 (€40), but now trades at $33.81 (€29). “The stock has now fallen to prices last seen in November 2009, despite sales and EPS that remain a good deal higher,” the analyst says. 

In its latest earnings release, covering the period ended 22 February 2026, General Mills posted net sales of $4.4 billion (€3.8B), down 8% from the same period in 2025. “If earnings rebound, the stock seems certain to follow,” O’Boyle concludes. 

Chewy

The online retailer’s P/E rose from 36 in 2024 to 67.5 in 2025. Currently, it’s 41.1. Its EV/EBITDA ratio fell from 56 in 2024 to 22.2 in 2026.

In April, Morningstar evaluated Chewy as trading with a 30% discount. “Of course, we rate it as a very high uncertainty because it is a growth stock. You need that growth in order for this company to really grow into the stock valuation, but we do rate it with a narrow economic moat [sustainable competitive advantage], based on its intangible assets,” says analyst David Sekera.

Sekera also pointed to strong fundamentals behind the company’s latest earnings release: 6.2% sales growth driven by volume increases and a 5% expansion in adjusted EBITDA margins.

Spectrum Brands 

The global consumer products manufacturer is in a mixed trajectory. On the one hand, its P/E ratio is falling: it went from 25.9 in 2024 to 15.3 in 2025. However, it is currently at 15.

On the other hand, its EV/EBITDA fell in 2025 (from 9.9 to 9.1) but rose to 10.8 in 2026. Daniel Jones, another analyst at Seeking Alpha, classifies the company as “one of the more expensive ones on a price-to-earnings basis,” noting that the stock price has risen 27.4% year-to-date.

However, Jones considers the company cheap on an EV/EBITDA basis. “Despite what I would consider to be difficult market conditions, Spectrum Brands is delivering on growth and profit expansion. The stock might not be cheap compared to other similar enterprises. But on an absolute basis, I would consider it to be a value play,” he adds.

In its latest earnings report for the quarter ended 29 March 2026, the manufacturer recorded a 4.9% increase in net sales and a 1.5% growth in organic sales. However, this represents a recovery from the previous quarter, when net sales declined 3.3%.

The current valuation reset underscores a broader shift in the pet sector, where slower growth and changing consumer dynamics are weighing on investor sentiment and long-term expectations.