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Deutsche Bank Provides Color on PetSmart, Hold

Deutsche Bank provided color on PetSmart (NASDAQ: PETM) after a meeting with its management. In a research report published today, Deutsche Bank remained optimistic about the company's prospects. It did not change its rating from Hold and price target from $46, however.

In the report, Deutsche Bank states, "We believe the biggest long term opportunity for PETM is in gross margins as it relates to inventory management. In particular, we see opportunity in optimizing store allocations and pricing as presently every store is assorted similarly and product is priced the same throughout the country, with the exception of hotels. PETM will need these drivers to achieve their 7%-12% EBT growth goal on 4%-7% sales gains over time. We expect a modest price increase in hotels this summer which should help margins in the back half and help offset higher occupancy costs as PETM has less incremental gains from lease renegotiations than in the past years."

In today's trading, PetSmart lost 0.11% and is currently trading at $44.83.

Posted-In: Deutsche Bank PetSmartAnalyst Color Analyst Ratings

 

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