Bank Of America Says PetSmart, Inc. 'Increasingly Less Likely To Be Taken Private'

In a note released Friday, Bank of America analyst Denise Chai reinstated shares of PetSmart, Inc. PETM with an Underperform rating and a $55 price objective.

Chai noted that shares of PetSmart are up 21 percent since Jana Partners announced a 9.9 percent stake in the company in July. However, she believes that since a potential buyer has not emerged following Jana's suggested sale of the company, the prospect of a deal appears to be diminishing.

Adding to her skepticism, Chai said PetSmart's high valuation and "challenged fundamentals" make a potential acquisition unattractive.

Shares of Pet Smart were trading down close to one percent.