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UBS maintained its Neutral rating and $46.00 price target on Chewy Inc . (NYSE:CHWY) Tuesday following the online pet retailer’s first-quarter results. The company demonstrated accelerating sales momentum in the quarter, with revenue growing 7.7% year-over-year to $12.1 billion, continuing its trend as a market share gainer in the pet supplies industry. According to InvestingPro data, the company maintains a "GOOD" overall financial health score.
The financial services firm noted that while Chewy showed positive sales growth, the results "left some questions unanswered" regarding the company’s profitability trajectory. UBS pointed out that Chewy’s profitability "was not as robust as anticipated" in the first quarter report, though InvestingPro data shows the company achieved a gross profit margin of 29.2% and maintains positive earnings with a diluted EPS of $0.91.
UBS revised its fiscal year 2025 adjusted EBITDA estimate downward to $672 million from $692 million and reduced its earnings per share forecast to $0.48 from $0.54. For fiscal year 2026, the firm now projects adjusted EBITDA of $830 million, down from $848 million, and EPS of $0.76, compared to its previous estimate of $0.91.
The firm acknowledged Chewy’s position as "a clear share-gainer" that continues to consolidate wallet share as the pet supplies industry increasingly moves online. UBS also highlighted the growing maturity of Chewy’s customer cohorts as a positive factor for the company.
Despite these strengths, UBS expressed less enthusiasm for Chewy shares at their current valuation of approximately 23 times next-twelve-months EBITDA, citing "less clear visibility into its profitability improvements" as a reason for maintaining its Neutral stance. Current InvestingPro analysis indicates the stock is trading near its Fair Value, with a P/E ratio of 44x and an EV/EBITDA multiple of 85.4x. For deeper insights into Chewy’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Chewy Inc. reported its first-quarter results, prompting various analyst reactions. Guggenheim raised its price target for Chewy to $45, citing strong customer growth that surpassed expectations, with an addition of approximately 240,000 active customers. JPMorgan also increased its price target to $47, noting continued execution and profitability improvements, and projecting potential upside in Chewy’s revenue guidance. Morgan Stanley (NYSE:MS) raised its price target to $50, highlighting strong customer growth and increased revenue estimates, despite a slight dip in net sales per active customer. Jefferies raised its price target to $44, acknowledging Chewy’s strong start to 2025 and market share gains, but maintained a Hold rating due to valuation concerns. Needham reiterated its Hold rating, citing valuation concerns despite Chewy’s strong positioning in the e-commerce sector and expected growth. These developments reflect a positive outlook from most analysts, with a focus on Chewy’s customer growth and revenue potential.
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