Chewy price target raised to $50 from $39 at Morgan Stanley

Morgan Stanley (NYSE:MS) raised its price target on Chewy Inc . (NYSE:CHWY) to $50 from $39 on Thursday, while maintaining an Overweight rating on the online pet retailer’s stock. According to InvestingPro data, Chewy’s stock has shown strong momentum with an 81.8% return over the past year, despite recent volatility.

The firm increased its revenue estimates following two consecutive quarters of strong active customer growth despite lower marketing spend, giving analysts more confidence in Chewy’s customer growth trajectory. With a current revenue of $11.86 billion and a healthy gross profit margin of 29.2%, InvestingPro analysis shows the company maintains strong financial fundamentals.

Morgan Stanley revised its forecasts, increasing projected net customer additions by 290,000 and 250,000 for 2025 and 2026 respectively, bringing the totals to approximately 890,000 and 880,000 new customers in those years. This adjustment raises the total active customer base by 1% in 2025 and 2% in 2026.

The firm noted a slight 1% decrease in net sales per active customer (NSPAC) in both years, as newer customers typically spend less initially, but emphasized these customers will contribute incrementally to revenue and margin over time given Chewy’s greater than 100% net revenue retention.

Despite weaker-than-expected first-quarter margins, Morgan Stanley views this as largely temporary and forecasts EBITDA margins above implied guidance at 5.9% in 2025 and 7.1% in 2026, translating to $734 million and $964 million in EBITDA dollars respectively.

In other recent news, Chewy Inc. has seen several adjustments in its stock price targets following its latest earnings reports and strategic developments. Goldman Sachs raised its price target to $48, citing strong sales growth and better-than-expected net active customer additions, while maintaining a Buy rating. The firm noted the momentum in strategic initiatives such as Autoship sales and the Chewy+ loyalty program. CFRA increased its price target to $53, highlighting Chewy’s solid performance across all categories and its expanding EBITDA margin. Despite slightly reducing its fiscal 2026 earnings per share estimate, CFRA maintains a Strong Buy rating, emphasizing Chewy’s strategic execution. Citi also raised its target to $49, pointing to Chewy’s growth outlook and potential for EBITDA margin expansion. Jefferies adjusted its target to $44, maintaining a Hold rating due to Chewy’s strong start to 2025 and positive market share gains. These developments reflect analysts’ confidence in Chewy’s ability to navigate market conditions and drive growth.

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