Chewy stock price target lowered to $43 from $46 at UBS

Investing.com - UBS lowered its price target on Chewy Inc. (NYSE:CHWY) to $43.00 from $46.00 on Thursday, while maintaining its Neutral rating on the online pet retailer’s stock. The new target sits within the broader analyst range of $33-$52, according to InvestingPro data.

The firm acknowledged that Chewy is gaining market share despite operating in a competitive environment where industry tailwinds have not yet materialized.

UBS characterized Chewy as a "sustainable growth narrative wrapped in a premium valuation," suggesting the stock’s future performance depends on the company’s ability to accelerate top-line growth and improve profitability on incremental sales.

The research firm noted that the recent pullback in Chewy shares has improved the stock’s risk-reward profile.

UBS indicated that for Chewy to realize potential upside, the company needs to deliver several quarters of results that exceed current market estimates.

In other recent news, Chewy Inc . reported second-quarter results that exceeded consensus estimates for both revenue and EBITDA, showcasing strong gross margins. Despite these positive outcomes, the company faced increased selling, general, and administrative expenses due to temporary cost items. Analysts from Seaport Global Securities upgraded Chewy to a Buy rating, highlighting the company’s 8.6% year-over-year revenue growth and strong performance in net sales per active customer. Meanwhile, TD Cowen lowered its price target for Chewy to $48 from $50, maintaining a Buy rating, citing temporary cost concerns. RBC Capital also adjusted its price target to $43 from $44, maintaining an Outperform rating, due to slower-than-expected margin progression. Jefferies reduced its price target to $41 from $44, maintaining a Hold rating, noting solid results but highlighting upcoming investment plans. Citizens JMP reiterated its Market Outperform rating with a price target of $48, pointing to increased service stickiness and success in the Chewy+ subscription program. These developments reflect a mixed outlook from analysts, with a focus on Chewy’s financial performance and strategic initiatives.

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