Jefferies downgraded WOOF to "hold" from "buy"
Petco Health and Wellness Company Inc (NASDAQ: WOOF) is rebounding from this morning's early losses, up 0.6% to trade at $24.89 at last check, despite a downgrade from Jefferies to "hold" from "buy." The firm cited WOOF's valuation after its recent rise, seeing a balanced risk/reward profile, as well as the labor shortage in regard to its veterinary services.
After bouncing off familiar support at the $21 level in early October, as well as its 60-day moving average, WOOF staged a steady climb until its early November peak at the $26 level. Faltering on the charts since then, the 30-day moving average still lingers below as potential support.
After today's bear note, seven of the 11 analysts in coverage carry a "buy" or better rating on Petco stock, with four at a "hold." Meanwhile, the 12-month consensus price target of $27.67 is an 11.4% premium to current levels.
Though shorts have been jumping ship, short interest still makes up 12.9% of the stock's available float. In other words, it would take over nine days to buy back these bearish bets, at WOOF's average pace of trading, leaving plenty of room for a short squeeze, should these bears continue to hit the exits.