Spain’s credit rating upgraded to ’A+’ by S&P on strong growth
Investing.com - TD Cowen has lowered its price target on Chewy Inc. (NYSE:CHWY) to $48.00 from $50.00 while maintaining a Buy rating on the pet products retailer. According to InvestingPro data, the stock is currently trading at elevated multiples with a P/E ratio of 117.36, suggesting rich valuation levels.
The firm’s adjustment comes after Chewy reported second-quarter results that slightly exceeded consensus estimates for both revenue and EBITDA, while also delivering strong gross margins of 29.45%. The company achieved revenue growth of 9.17% over the last twelve months, reaching $12.3 billion. Despite these positive metrics, the company experienced higher selling, general and administrative expenses due to what TD Cowen described as "temporary cost items."
Chewy provided third-quarter revenue guidance approximately 1% above consensus and raised its full-year fiscal 2025 revenue guidance. The company’s shares fell approximately 17% following the announcement, which TD Cowen attributed to "elevated buyside expectations and higher SG&A expenses" in the second quarter.
TD Cowen made modest adjustments to its financial model for Chewy, raising revenue projections by approximately 2% for fiscal years 2026 through 2030. Despite the price target reduction, the firm maintained its Buy recommendation on the stock.
The pet e-commerce company continues to show revenue growth and margin strength, though investors appeared to react negatively to the increased expenses reported in the most recent quarter.
In other recent news, Chewy Inc . reported a solid second-quarter revenue growth of 8.6% year-over-year, demonstrating strong performance in net sales per active customer and gross margins, as noted by Seaport Global Securities. Following these results, Seaport Global upgraded Chewy’s stock to Buy, setting a price target of $47.00. Meanwhile, RBC Capital and Jefferies have both lowered their price targets for Chewy to $43.00 and $41.00, respectively, citing concerns over margins and upcoming investments. Despite these adjustments, RBC maintains an Outperform rating, while Jefferies holds a Hold rating.
Additionally, Citizens JMP has reiterated its Market Outperform rating with a price target of $48.00, highlighting the growing stickiness of Chewy’s services and the positive impact of the Chewy+ subscription program. On the other hand, BNP Paribas Exane has reduced its price target to $34.00, maintaining a Neutral rating due to concerns about high market expectations. These recent developments reflect a mixed sentiment among analysts regarding Chewy’s future performance.
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