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Investing.com - Barclays has reiterated its Overweight rating and $50.00 price target on Chewy Inc. (NYSE:CHWY), currently trading at $38.94 with a market capitalization of $16.1 billion, despite the stock’s recent 14% decline amid relatively modest negative estimate revisions. According to InvestingPro data, 10 analysts have recently revised their earnings estimates upward for the upcoming period.
The research firm noted that Chewy’s stock performance stands in contrast to the broader NASDAQ, which has gained 10% during the same period. Barclays expressed surprise at the continued weakness following a ~$1 billion sale from BC Partners, which it had expected might serve as a "clearing event" for short sellers. The stock’s volatility is reflected in its beta of 1.67, indicating higher market sensitivity than average.
Barclays acknowledged investor concerns regarding the slowing pace of gross margin improvement, both in advertising and core product gross margins. The company currently maintains a gross margin of 29.24% with revenue growth of 7.7% over the last twelve months. However, the firm maintains that Chewy still has "plenty of runway ahead for ads adoption," referencing its July 29, 2025, research on Chewy’s advertising potential.
The research firm believes investors will focus primarily on gross margin progression in the upcoming quarterly report, looking for both year-over-year improvement and sequential upticks. While overall top-line growth remains solid, Barclays noted potential slowing in sequential active customer net additions following strong outperformance in the previous two quarters.
Barclays also highlighted that Chewy’s FedEx contract will likely come up for renewal in January 2026, potentially leading to mid-to-high single-digit rate increases that could create "transitory GM headwinds" similar to those observed in early fiscal year 2022. With Chewy’s next earnings report scheduled for August 27, 2025, investors seeking deeper insights can access comprehensive analysis and 14 additional key metrics through InvestingPro’s detailed research reports.
In other recent news, Chewy Inc . has been the focus of several significant developments. BC Partners, the company’s largest shareholder, announced a $1 billion public offering of Chewy’s Class A common stock. Chewy will not benefit financially from this offering, as it is not selling any shares; however, the company plans to repurchase $100 million worth of its stock from the selling shareholder. Meanwhile, BofA Securities has maintained its Buy rating on Chewy, citing the company’s growth potential in the veterinary care and pharmaceuticals market, which is valued at $40 billion. JMP Securities and Citizens JMP have both raised their price targets for Chewy to $48, highlighting the substantial U.S. pet spending market and the company’s revenue visibility through its autoship feature. These firms maintain a Market Outperform rating on the stock, reflecting confidence in Chewy’s core business.
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