Petco Jumps as BofA Calls it a Buy; Cites Reopening Trends By Investing.com

Dhirendra Tripathi

Investing.com – Shares of Petco Health (NASDAQ:WOOF) rose 7% on Friday after BofA Securities upgraded the stock to buy from neutral.

The brokerage’s $28 price target is 17% higher than the stock’s current level. BofA cited the trend of higher pet adoption in the U.S. for its optimistic outlook.

The health and wellness company for pets is seen benefiting from tailwinds in the industry, including a recovery in services as markets reopen and longer-term growth across the chain’s services online, according to the brokerage.

On Thursday, Petco gave an optimistic forecast for the year. It sees 2021 revenue between $5.25 billion and $5.35 billion. The projections represent an increase in a range of 7.1% and 9.2% compared to last year.

The company used its January IPO proceeds to halve its net debt to $1.5 billion.

Petco said the fruits of its efforts at transformation into an omnichannel health and wellness provider were proving to be successful, something BofA also pinned its hopes on while giving its forecast.