UPDATE: Piper Jaffray Raises PetSmart's PT on Higher Valuation
Piper Jaffray reiterated its Overweight rating on PetSmart (NASDAQ: PETM) and increased its price target from $68 to $80.
Piper Jaffray commented, "We are maintaining our Overweight rating and raising our price target to $80 (from $68) following very solid Q2 results. We have believed for some time that PETM is a +20% EPS growth story -- particularly with an inflation kicker -- and the market now appears willing to pay a 20x on PETM shares given strong results, consistency, and a favorable long-term industry growth backdrop. While comps will likely decelerate for the next 2-3 quarters given a waning inflation tailwind, business fundamentals remain very healthy and could potentially improve further from recent category resets and easy gross margin compares."
PetSmart closed at $70.83 on Thursday.
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