PetSmart To Be Sold; UBS Raises Price Target To $83
UBS analyst Michael Lasser weighed in with his thoughts on PetSmart (NASDAQ:PETM), reiterating a Neutral rating and raising his price target to $83 (from $77), as the company will be acquired by a consortium of private equity firms for $83 per share.
Lasser wrote, “We think it’s a full and fair price and there are unlikely to be other bidders. With a transaction value of $8.7 billion, it’s a big deal. While we don’t think it will necessarily usher in a new era of increasingly larger leveraged buyouts in hardline retail, it’s sure to draw attention and shows that not a lot is off the table at this point.”
The analyst added, “As a privately-held company, PETM will have the chance to make some longer-term decisions, such as investing in its omni-channel experience, without having to meet the market’s short-term expectations. Also, it could have the opportunity to build on the $200 mm in cost savings that it committed to last quarter.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Michael Lasser has a total average return of 12.4% and a 70.4% success rate. Lasser has a 10.3% average return when recommending PETM, and is ranked #296 out of 3412 analysts.