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Investing.com - BofA Securities has reiterated its Buy rating and $49.00 price target on Chewy Inc . (NYSE:CHWY), citing the pet retailer’s growth potential in veterinary care and pharmaceuticals. The target represents significant upside from the current price of $37.81, with InvestingPro data showing 10 analysts recently revising their earnings expectations upward.
The bank highlighted that veterinary care and pharmaceuticals represent a $40 billion market according to the American Pet Products Association (APPA), making it the second-largest expense for pet owners after food and treats. Chewy appears well-positioned to capture this market, with the company generating $12.1 billion in revenue over the last twelve months and maintaining profitable operations with a healthy gross margin of 29.2%.
BofA expects growth in this segment to accelerate around 2026-2027, driven by improving pet adoption trends and as pets adopted during the COVID pandemic enter their senior years.
The research firm believes Chewy is "well-positioned to capitalize" on these trends with its growing veterinary practice and leading pharmacy market share.
BofA projects potential for over $1 billion in revenue from Chewy’s veterinary care locations and increased customer penetration in pharmacy services, an opportunity the firm believes "the Street underappreciates."
In other recent news, Chewy Inc. has been the focus of several key developments. The company announced a $1 billion public offering of its Class A common stock by its largest shareholder, BC Partners, with Chewy set to repurchase $100 million worth of shares, a move approved by an independent committee of its board. Chewy will not receive any proceeds from this offering. Meanwhile, JMP Securities and Citizens JMP have both raised their price targets for Chewy to $48, citing the company’s strong core business and revenue visibility from its autoship program, as well as potential growth in advertising and health segments. UBS maintained a Neutral rating with a $46 price target, noting Chewy’s accelerating sales momentum but expressing concerns about its profitability trajectory. UBS has adjusted its earnings estimates for Chewy, lowering its fiscal year 2025 and 2026 EBITDA and EPS forecasts. Despite these adjustments, UBS acknowledged Chewy’s continued market share gains in the pet supplies sector. These recent developments highlight the mixed analyst sentiment and strategic financial maneuvers surrounding Chewy.
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