Petco price target lowered to $5 from $9 at Morgan Stanley

Morgan Stanley lowered the firm’s price target on Petco to $5 from $9 and keeps an Equal Weight rating on the shares. The company beat sales and adjusted EBITDA expectations in Q2, but near-term earnings visibility is “cloudy at best” following the company having lowered if FY23 adjusted EBITDA guidance, the analyst tells investors. A slowing rate-of-change on sales and margins is “shaping the downside case,” while services growth is “shaping the upside,” leaving the risk/reward “wide and balanced,” the analyst tells investors.