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PetSmart (NASDAQ:PETM) was downgraded by analysts at Bank of America from a “neutral” rating to an “underperform” rating in a research report issued to clients and investors on Tuesday, Analyst RN reports. They currently have a $60.00 target price on the stock, down from their previous target price of $77.00. Bank of America’s price target indicates a potential downside of 13.51% from the company’s current price.

The analysts wrote, “We are downgrading PETM from Neutral to Underperform and lowering our PO to $60 (13x 2014-15 P/E) from $77 (16x P/E). “In addition to our concerns that PETM was losing share to Petco, TSCO and independents while facing adoption headwinds, we now believe that its core product category, super premium natural pet food, may be at risk from 1) the potential introduction of natural food in the mass channel, which would hurt sentiment and PETM’s valuations and 2) increasing dependence on Blue Buffalo, which could alienate customers loyal to other brands which have lost shelf space in PETM’s latest reset. Given a more cautious outlook, we are reducing our ests: 2014/15/16E is $4.40/4.90/5.41 ($4.48/5.07/5.67 prior).”

Shares of PetSmart (NASDAQ:PETM) traded down 1.43% on Tuesday, hitting $68.38. 600,772 shares of the company’s stock traded hands. PetSmart has a 52-week low of $62.12 and a 52-week high of $77.32. The stock has a 50-day moving average of $67.88 and a 200-day moving average of $69.8. The company has a market cap of $6.746 billion and a P/E ratio of 17.26. PetSmart also was the target of a large increase in short interest in January. As of March 31st, there was short interest totalling 16,175,098 shares, an increase of 15.4% from the March 14th total of 14,010,523 shares. Based on an average daily volume of 1,605,102 shares, the days-to-cover ratio is presently 10.1 days. Currently, 16.6% of the company’s stock are short sold.

PetSmart (NASDAQ:PETM) last posted its quarterly earnings results on Wednesday, March 5th. The company reported $1.28 EPS for the quarter, beating the Thomson Reuters consensus estimate of $1.21 by $0.07. The company had revenue of $1.80 billion for the quarter, compared to the consensus estimate of $1.83 billion. During the same quarter in the prior year, the company posted $1.24 earnings per share. The company’s quarterly revenue was down 4.0% on a year-over-year basis. Analysts expect that PetSmart will post $4.46 EPS for the current fiscal year.

The company also recently declared a quarterly dividend, which is scheduled for Friday, May 16th. Stockholders of record on Friday, May 2nd will be given a dividend of $0.195 per share. This represents a $0.78 dividend on an annualized basis and a yield of 1.12%. The ex-dividend date of this dividend is Wednesday, April 30th.

Other equities research analysts have also recently issued reports about the stock. Analysts at BofA Merrill Lynch downgraded shares of PetSmart from a “neutral” rating to an “underperform” rating in a research note on Tuesday. They now have a $60.00 price target on the stock, down previously from $77.00. Separately, analysts at Wolfe Research upgraded shares of PetSmart from an “underperform” rating to a “market perform” rating in a research note on Tuesday, March 25th. Finally, analysts at Jefferies Group raised their price target on shares of PetSmart to $68.00 in a research note on Thursday, March 6th. They now have a “hold” rating on the stock. Four equities research analysts have rated the stock with a sell rating, seven have issued a hold rating and six have given a buy rating to the company. PetSmart has a consensus rating of “Hold” and a consensus price target of $69.90.

PetSmart, Inc supplies products, services and solutions for the lifetime needs of pets. The Company operates a website for pet supplies, foods and different animal needs.

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