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PetSmart downgraded by UBS, Credit Suisse

NEW YORK (AP) -- A pair of analysts downgraded PetSmart on Wednesday, with one saying the pet supplies retailer is vulnerable to lower customer traffic.

Credit Suisse's Gary Balter said in a client note that shoppers may have made fewer trips to PetSmart stores recently and instead purchased online as they dealt with bad winter weather.

Balter said it's clear based on retailers that have already reported their quarterly results that the bad weather and soft spending among low-income shoppers is hurting performances.

Balter lowered PetSmart to "Neutral" from "Outperform" and reduced its price target to $70 from $78.

Michael Lasser of UBS lowered PetSmart Inc. to "Neutral" from "Buy" and cut its price target to $72 from $82.

The analyst said that there are several uncertainties overhanging the stock. Lasser said the departure of Chief Operating Officer Joseph O'Leary adds a layer of "unexplainable circumstances." The company announced Tuesday that O'Leary is retiring and that it doesn't plans to replace the COO position. Instead, PetSmart said that it will realign the COO responsibilities among four newly created executive vice president positions. The changes being made are effective on April 4.

Lasser also believes the company will have a hard time gaining incremental market share due to its existing sizeable position.

A representative for PetSmart did not immediately respond to an email seeking comment.

Shares of PetSmart fell $1.27, or 1.9 percent, to $65.83 in afternoon trading. Its shares are down almost 4 percent for the past year.