J.P. Morgan Reiterates Neutral on PetSmart Following Executive Meetings

In a report published Wednesday, J.P. Morgan analyst Christopher Horvers reiterated a Neutral rating and $72.00 price target on PetSmart PETM.

In the report, J.P. Morgan 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 closed on Tuesday at $67.33.