Wedbush Assumes Coverage Of PetSmart

In a note released Friday, Wedbush analyst Seth Bashman assumed coverage on

with a Neutral rating and a $60 price target. The firm previously had the company rated as Outperform. Bashman wrote, "We believe investors view threats from increased competition and brand migration to mass and grocery as weighing heavily on this retailer who is operating at peak sales productivity and margins." He acknowledged this threat has been present in the past, but emphasized its importance as consumer behavior is changing rapidly. Bashman pointed out PetSmart is in need of an improved online presence and may be losing out on valuable customers who would place repeat orders. To this point he noted the company has increased its omnichannel investments, but doesn't expect immediate benefit. Looking forward, Bashman's 2014 and 2015 EPS estimates of $4.30 and $4.65 are below the consensus by $0.02 and $0.09, respectively.