Ahead of the Bell: Petsmart Upgrade

Banc of America Securities analyst David Strasser raised Petsmart to "Buy" from "Neutral" in a client note. Strasser boosted his profit outlook to $1.53 per share from $1.47 for fiscal 2008 and raised his 12-month price estimate to $26 from $19.

Shares of Phoenix-based Petsmart were unchanged at $20.91 in premarket trading.

Strasser said that the company's product lines 40 percent of which are "consumables," such as pet food make it more likely to ride out inflationary pressures. He said Petsmart also benefits from weak competition and a slowdown in store growth.

He added Petsmart would be a "sleeper" in the way it benefits from the forthcoming economic stimulus package, saying its customers are likely to spend some of their rebates at its stores.

Shares of Petsmart have fallen by almost half from a 52-week high of $35.48 last May.