How Will PetSmart (PETM) Stock React To Possible Leveraged Buyback Deal?

NEW YORK (TheStreet) -- PetSmart Inc. (PETM) hired JPMorgan Chase (JPM) to assess the company's options, including a potential private equity deal, and a leveraged share buyback, Reuters reports.

Recently, PetSmart investors have been advising the $7 billion pet supply company to consider selling itself, as competition from larger retailers continues to put pressure on specialty stores.

Buyout firms have been interested in taking PetSmart private for a while, and with investors urging the sale, many have begun looking into a leveraged buyback option, sources told Reuters.

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Shares of PetSmart are up 0.87% to $69.53 at the beginning of trading on Wednesday. 

Separately, TheStreet Ratings team rates PETSMART INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate PETSMART INC (PETM) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, notable return on equity, increase in net income and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins."

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