"We believe PETM continues to improve with innovation and differentiation to drive sales productivity and we are impressed by the cash-generating capabilities of the model," JPMorgan analysts wrote in a report Wednesday. "The management team is focused on the right strategies and remains shareholder-friendly in terms of capital allocation. While we believe the hardgoods recovery will lag the economic recovery, the biggest impediment is price as we believe the stock is largely reflective of the company's strong execution. As such we'd be more attracted on dips as we see this as a stable, well-run company that will consistently generate cash and return that to shareholders largely through buybacks."Shares of PetSmart hit a 52-week high Thursday of $64.38. The stock's 52-week low of $37.76 was set on Aug. 8. PetSmart has a forward P/E of 17.47; the average for specialty retailers is 14.82. Fourteen of the 24 analysts who cover PetSmart rated it hold; 10 analysts gave the stock a buy rating. The stock has risen 24.44% year to date.
Bob Evans "We maintain our Hold rating on Bob Evans Farms (BOBE) as the company embarks on its new fiscal year (FY13)," Miller Tabak analysts wrote in a May 14 report. "We think the top line at the core Bob Evans concept is likely to continue positive momentum in FY13 thanks to a greater contribution from renovated units and incremental--albeit modest--new unit expansion. We also assume slightly lower sow costs will lift profitability, particularly in the Food Products division. However, we forecast FY13 will be another year of comp declines at Mimi's Café as we do not see a catalyst for a turnaround, and we still do not rule out a potential sale of Mimi's. We raise our fair value estimate to $43 (from $37) as we model sales growth in the core Bob Evans restaurant concept and Food Products division, the change in our base valuation year to FY14, and the possibility of a private equity investment, though our view remains tempered by limited visibility at Mimi's Café." Shares of Bob Evans hit a 52-week high of $40.75. The stock's 52-week low of $27.41 on Oct. 4. Bob Evans' forward P/E is 15.12; the average for restaurant and bar companies is 16.42. For comparison, Wendy's (WEN) has a higher forward P/E of 22.44. Analysts were split on Bob Evans with two giving the stock a buy rating and another two rating it hold. The stock has risen 20.63% year to date.
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