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Morgan Stanley Starts Coverage on PetSmart with “Overweight” Rating (PETM)

By Dividend.com,  June 13, 2012, 12:54:54 PM EDT

Pet products retailer PetSmart, Inc. ( PETM ) on Wednesday caught some bullish commentary from analysts at Morgan Stanley.

The firm initiated coverage on PETM with an "Overweight" rating and $75 price target, suggesting a 13% upside to the stock's Tuesday closing price of $66.35.

A Morgan Stanley analyst commented, "We see four drivers of upside to consensus EPS and a bullish view, 1) Stable 3-5% industry growth and PETM modestly increasing share, 2) 7-10% services growth, 3) 100-200 bps of margin leverage from premium/proprietary mix and efficiency, 4) A focus on increasing cash flow and return of capital."

PetSmart shares were up 89 cents, or +1.3%, in afternoon trading Wednesday.

The Bottom Line
Shares of PetSmart ( PETM ) have a .84% dividend yield, based on last night's closing stock price of $66.35. The stock has technical support in the $58-$59 price area. The shares are trading at all-time highs.

PetSmart, Inc. ( PETM ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Stocks

Referenced Stocks: PETM



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