PetSmart Trading Near Fair Value

Tags: petm
21 Nov 3:02am
Posted by ZacksResearch
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PetSmart, Inc. (PETM) is the leading specialty retailer of services and solutions for pets. The company reported in-line results for the third quarter results. Looking ahead to 2009, management indicated that is not immune from the slowing economy and will scale back on new store openings and capital spending. We maintain our Hold rating on PETM shares, as the valuation looks fair.

PetSmart shares currently trade at 10.0x our fiscal year 2008 EPS estimate and 9.5x our fiscal year 2009 EPS estimate. At its current valuation, PETM shares appropriately reflect the company's near-term challenges and its long-term growth opportunities, in our view. Our target price is $15.50, which is 10x our fiscal year 2009 EPS estimate.

Read the full analyst report on PETM




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