Petco downgraded to Neutral at Baird after ‘latest operational reset’

As previously reported, Baird analyst Peter Benedict downgraded Petco to Neutral from Outperform with a price target of $3, down from $8, telling investors after management’s “latest operational reset” that the timing of profit stabilization and inflection is “proving more elusive than we anticipated.” The operational reset that includes increased value assortment and labor and supply chain efficiency efforts is “understandable,” but brings with it an added level of uncertainty and the stock’s valuation “doesn’t screen as compelling,” even following today’s roughly 30% decline, the analyst added.