JP Morgan Maintains "Neutral" Rating on PetSmart (PETM)

JP Morgan Maintains “Neutral” Rating on PetSmart (PETM)


JP Morgan announced on Wednesday that it has maintained a “Neutral” rating on pet supply retailer, PetSmart, Inc. (PETM).

The firm has reaffirmed a “Neutral” rating and $72 price target on PETM. This price target suggests a 7% increase from the stock’s current price of $67.15.

An analyst from the firm noted, “we hosted meetings with PETM’s recently elevated CEO David Lenhardt and newly appointed CFO Carrie Teffner. We walked away affirmed in our view that the industry and secular trends driving sales remain solid (2-4% comps), albeit slower than the past three years of rapid growth (5-6%). Execution remains sharp with innovation, resets, and a cohesive approach supporting sales. The stock remains one of the more controversial names in our group, and we continue to believe the stock is still transitioning with solid, but more modest, EPS growth, driving a shareholder base turnover. As noted below, generally the question for the longs is when it is okay to step in again. Looking ahead, we look to hear from David and Carrie on their first conference call as the senior leaders in August and note that comparisons more significantly fall off in 4Q (PETM posted 7.5%, 7.0%, 6.5%, and 4.6% comps during the quarters of 2012, respectively).”

PetSmart shares were mostly flat during Wednesday afternoon trading. The stock has been mostly flat YTD.

The Bottom Line
Shares of PetSmart, Inc. (PETM) have a 0.98% yield, based on Tuesday’s closing price of $67.29.

PetSmart, Inc. (PETM) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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