Analyst Simeon Gutman from Morgan Stanley maintained a Hold rating on Petco Health and Wellness Company and decreased the price target to $3.75 from $4.50.
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Simeon Gutman has given his Hold rating due to a combination of factors impacting Petco Health and Wellness Company. Despite encouraging execution and profitability improvements, the company continues to face challenges with negative comparable sales, marking the third consecutive quarter of decline. This trend is expected to persist into early 2026, which poses a significant concern for sustained growth.
Gutman notes that while there is potential for upside if Petco can achieve a turnaround in sales through its “Phase 3” investments, the current lack of visibility on a consistent positive sales trajectory limits immediate optimism. The company’s efforts to expand EBITDA margins through disciplined retail execution are promising, but the complexity added by tariffs and incremental investments further complicates the outlook. Consequently, the price target has been lowered to $3.75, reflecting a cautious stance given the uncertainties surrounding a return to positive growth.
In another report released today, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $2.50 price target.