From Josh Kannourakis, Baillieu Holst (via Mathan Somasundaram): We upgrade our rating on Greencross (ASX:GXL) to a BUY with a price target of $9.60 (prev

From Josh Kannourakis, Baillieu Holst (via Mathan Somasundaram): We upgrade our rating on Greencross (ASX:GXL) to a BUY with a price target of $9.60 (prev. $9.05) post recent share price weakness and a revision of our assumptions. We view GXL as a high quality speciality retailer that has: 1) A leading position within the $7bn and growing pet care market with a large acquisition pipeline (5% market share vs 20% target); 2) significant potential for margin expansion through realisation of synergies between the retail and vet businesses; and 3) sustainable revenue and earnings growth potential through its store rollout and co-location strategy. We are also encouraged by the potential revenue synergies within the merged group; only 20% of Greencross Vet customers shop at Petbarn and only 6% of Petbarn customers use Greencross (+Petbarn's loyalty program has ~1.1m members). See the full review on page 12. (VIEW LINK)