J.P. Morgan Ups PT On PETM To $45

J.P. Morgan has raised its price target from $43 to $45 on PetSmart Inc. PETM as the company navigates a shifting story. According to J.P. Morgan, “The results of PETM merchandising efforts are now in full stride and while we anniversary the big initiatives by 2H (creating risk to slowing traffic growth), momentum is likely to remains solid given stepped up advertising, 1-2% comp inflation, and the 50% consumable penetration. Importantly we note that gross margin expansion will become more comp and hardgoods dependent once we anniversary discrete pressures in 2Q, which combined with a deceleration in new merchandising initiatives, could diminish some of the upward earnings surprises (and thus macro, advertising, and inflation become a bigger piece to the story).” J.P. Morgan maintains a Neutral rating on the stock. PETM closed yesterday at $44.80.