Piper Jaffray Reiterates PETS Underweight Rating, $12.50 PT

Piper Jaffray is reiterating its Underweight rating on PetMed Express, Inc. PETS “as we believe heightened competition is continuing to pressure both volumes and pricing on pet medications.” “Recent analysis of traffic to PETS web sites confirms this, in our opinion, as October and November site visits were down over 30% versus last year, in spite of extremely weak comps,” Piper Jaffray writes. “FY11 earnings are likely to decline approx. 15% and we expect only mid-single digit EPS growth in FY12, hardly justifying the current 17x P/E multiple on FY12 estimates. We remain cautious ahead of the company's FQ3 results expected to be released later this month and reiterate our Underweight rating and $12.50 PT on PETS.” PetMed Express closed Monday at $17.89.