PetSmart (NASDAQ:PETM) was downgraded by investment analysts at Bank of America Corp. from a “buy” rating to a “neutral” rating in a note issued to investors on Friday, TheFlyOnTheWall.com reports. They currently have a $80.00 price objective on the stock, down from their previous price objective of $90.00. Bank of America Corp.’s price target points to a potential upside of 9.97% from the company’s current price.
The analysts wrote, “We are downgrading PETM from Buy to Neutral and lowering our PO to $80, based on 17.5x 2014 P/E (19x prior). We see multiple headwinds to comp-store growth and valuations, namely 1) market share losses, 2) slower momentum in in-store adoptions, 3) sentiment overhang from online competition longer-term, and 4) slower-than-expected new household formation is delaying a recovery in high-margin hardgoods. While we are positive on PETM’s continued product resets, we think they are unlikely to fully offset the headwinds. Our new estimates are as follows: 2013 is now $3.96 based on 3.4% comps ($3.98 on 3.5% comps prior); 2014 is $4.57 on 3.5% comps ($4.72 on 4.5% comps prior); and 2015 is $5.26 also on 3.5% comps ($5.57 on 4.5% comps prior). Given that valuations largely track comps, we believe share performance will be lackluster until comps re-accelerate.”
Several other analysts have also recently commented on the stock. Analysts at McLean Capital Management downgraded shares of PetSmart from a “buy” rating to a “neutral” rating in a research note to investors on Friday, October 25th. Separately, analysts at ISI Group initiated coverage on shares of PetSmart in a research note to investors on Tuesday, October 22nd. They set a “neutral” rating on the stock. Finally, analysts at Barclays reiterated a “buy” rating on shares of PetSmart in a research note to investors on Friday, October 18th. They now have a $82.00 price target on the stock. One investment analyst has rated the stock with a sell rating, ten have given a hold rating and seven have issued a buy rating to the stock. The stock currently has a consensus rating of “Hold” and an average target price of $74.92.
PetSmart (NASDAQ:PETM) traded down 1.40% on Friday, hitting $71.73. The stock had a trading volume of 293,371 shares. PetSmart has a 52 week low of $61.30 and a 52 week high of $77.32. The stock’s 50-day moving average is $73.69 and its 200-day moving average is $70.84. The company has a market cap of $7.453 billion and a P/E ratio of 18.87.
PetSmart (NASDAQ:PETM) last released its earnings data on Wednesday, August 21st. The company reported $0.89 earnings per share for the quarter, beating the analysts’ consensus estimate of $0.06 by $0.83. The company had revenue of $1.71 billion for the quarter, compared to the consensus estimate of $1.71 billion. During the same quarter last year, the company posted $0.71 earnings per share. PetSmart’s revenue was up 5.3% compared to the same quarter last year. Analysts expect that PetSmart will post $3.97 EPS for the current fiscal year.
The company also recently announced a quarterly dividend, which is scheduled for Friday, November 15th. Shareholders of record on Friday, November 1st will be paid a dividend of $0.20 per share. This represents a $0.78 annualized dividend and a dividend yield of 1.07%. The ex-dividend date is Wednesday, October 30th. This is a positive change from PetSmart’s previous quarterly dividend of $0.17.
PetSmart, Inc supplies products, services and solutions for the lifetime needs of pets. The Company operates a website for pet supplies, foods and different animal needs.
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