Pet Retailer Pops on Analyst Praise

Petco reported upbeat second-quarter earnings before the open yesterday

Assistant Editor
Aug 20, 2021 at 10:03 AM
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Petco Health and Wellness Company, Inc (NASDAQ:WOOF) stock is up 4.8% to trade at $20.94 at last check, after the pet supply retailer received an upgrade from Credit Suisse to "outperform" from "neutral," following yesterday's upbeat second-quarter earnings report and full-year guidance. Meanwhile, Jefferies raised its price target to $25 from $24, while UBS slashed its price objective to $22 from $27. 

Today's pop has WOOF breaking above the $20.60 level for the first time this month, as well as the 40-day moving average, which kept a lid on yesterday's gains. Publicly traded since its January initial public offering at $18, the equity is down 12.1% over the last six months. 

Ahead of today's adjustments, the majority of analysts were already bullish on Petco stock, with seven of the 11 in coverage carrying a "buy" or better rating, and four a tepid "hold." Plus, the 12-month consensus price target of $27.33 was a 30.7% premium to current levels. 

Meanwhile, the options pits are buzzing with activity straight out of the gate this morning. So far, 4,870 calls have crossed the tape, which is 15 times the call volume typically seen at this point, and pacing for the 98th percentile of its annual range. Most popular is the August 20 call, with the monthly contract expiring at the end of the day today. 

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