In a report released yesterday, Kendall Toscano from Bank of America Securities reiterated a Sell rating on Petco Health and Wellness Company, with a price target of $3.00.
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Kendall Toscano has given his Sell rating due to a combination of factors impacting Petco Health and Wellness Company. Despite reporting a third-quarter adjusted EBITDA of $99 million, which was above expectations, the company experienced a year-over-year net sales decline of 3.1%. This decline was driven by a decrease in comparable store sales and the impact of store closures. While services showed some growth, the consumables and supplies segments faced significant declines.
Additionally, Toscano notes that although Petco is making strides in cost management and profitability, there are persistent challenges. The company faces ongoing pressure from declining same-store sales and the risk of losing market share to online and broadline competitors. These factors contribute to a cautious outlook, leading Toscano to maintain an Underperform rating with a slightly raised price objective of $3.00.
According to TipRanks, Toscano is a 2-star analyst with an average return of 2.8% and a 68.42% success rate.