BofA double downgrades Petco on meaningful market share erosion

BofA double downgraded Petco to Underperform from Buy with a price target of $1.50, down from $5. The analyst says Petco “has lost much of its competitive bite.” The company’s market share has eroded meaningfully as consumer have migrated to online to competitors with greater convenience and value, the analyst tells investors in a research note. The firm expects Petco’s profits to deteriorate further into the first half of 2024, adding to 11 straight quarters of declining profitability. The company has also slowed the opening of new vet hospitals, which help it differentiate versus peers, “another worrisome sign,” contends BofA.