Ahead of the Bell: Petsmart downgraded

Analyst Matthew J. Fassler lowered his rating to "Neutral" from "Buy" but raised his price target to $29 from $27.

In a note to investors, Fassler said sales have grown quickly due to inflation, which has boosted prices on Petsmart's products. Price increases were passed along to customers as recently as the second quarter, he noted. Pet food stores have had to boost prices due to the high cost of food and ingredients.

But the analyst said that sales "catalyst" may fade within the next two quarters.

Near-term, however, same-store sales, or sales at stores open at least a year, are likely to grow. Same-store sales rose 4 percent in the second quarter.

Same-store sales is a key indicator of retailer performance since it measures growth at existing stores rather than newly opened ones.

Petsmart shares were unchanged from Friday's closing price at $28 in premarket trading.