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Its symbol is “WOOF” on the Nasdaq. Is the stock a buy?

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PETCO is a well-known retail company in the United States that specializes in pet supplies and services. Founded in 1965, PETCO serves as a one-stop shop for pet owners, offering a wide range of products for various pets, including dogs, cats, fish, birds, reptiles, and small animals.

PETCO’s stores are designed to provide a comprehensive shopping experience for pet owners, featuring an extensive array of pet food, toys, accessories, grooming supplies, and health products. The company places a strong emphasis on offering high-quality and diverse product choices to cater to the specific needs of different pets.

Beyond its retail operations, PETCO offers services such as pet grooming, training classes, and veterinary care through partnerships with animal hospitals and clinics. The company strives to support pet owners in providing the best care and well-being for their furry, feathered, or scaled companions.

PETCO has also been involved in various initiatives related to animal welfare and community outreach. It has supported adoption events, rescue organizations, and programs that promote responsible pet ownership.

Over the years, PETCO has adapted to changing consumer preferences and trends in the pet industry, continuously expanding its offerings and services to meet the evolving needs of pet owners.

Is Petco Stock a buy?

According to Marketbeat, the consensus is that Petco is a “Moderate Buy”, with an average analyst target of $11.29, which represents an upside of $65.08.

The high target on the stock is $16.00 and the low is $8.50.

“Analysts like Petco Health and Wellness more than other Retail/Wholesale companies,” Marketbeat says. “The consensus rating for Petco Health and Wellness is Moderate Buy while the average consensus rating for retail/wholesale companies is Hold.”

Petco focused on Pet Health

According to CNBC, both Petco and Chewy, a more digitally-focused rival, are focused on pet health, which is booming.

“The boom turned the overall U.S. pet market into a $123.6 billion dollar powerhouse in 2021, and it’s expected to grow to $200 billion by the end of the decade, according to the American Pet Products Association and new research from Bloomberg Intelligence.”

Petco and COVID-19

One analyst says the rise in adoptions during the COVID pandemic means a long runway for Petco.

“A puppy that was, you know, adopted or bought, during 2020 is now three years old. As they get older, they’re only going to require more health care,” Needham analyst Anna Andreeva told CNBC. “And I think both companies are being smart in developing those verticals.”

On August 8, RBC analyst Steven Shemesh maintained his “Buy” rating and $10.00 12-month target on Petco Health.

Petco coverage at RBC Capital

“Longer term, we believe the company is well positioned to take share of the already fast-growing U.S. pet category given its revised company strategy, structurally advantaged real-estate portfolio, and vet expansion opportunity,” the analyst said in November 2022, upon commencing coverage of the stock.

 

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