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JPMorgan raised its price target on Chewy Inc . (NYSE:CHWY) to $47 from $36 on Thursday while maintaining an Overweight rating on the online pet retailer. The firm cited continued execution, active customer growth, and profitability improvements as key factors behind the more bullish outlook. According to InvestingPro data, Chewy has demonstrated strong financial performance with a return on assets of 12.7% and has been profitable over the last twelve months, generating $392.7 million in net income.
The research firm believes the post-earnings pullback in Chewy shares is "overdone" and notes the company is delivering across its entire user funnel with growing gross additions and reactivations while churn is improving. This view aligns with InvestingPro data showing Chewy’s impressive 81.8% one-year price return, despite recent volatility. Chewy expects low-single-digit percentage year-over-year active customer growth in fiscal 2025, but JPMorgan says the company is already operating at the higher end of that range.
JPMorgan projects Chewy will add 126,000 active customers quarter-over-quarter in the second quarter and 656,000 year-over-year in fiscal 2025, with potential for upside. The firm also suggests Chewy’s full-year guidance of $12.30 billion to $13.45 billion in revenue could prove conservative, with the company tracking toward the upper half of its range.
The research firm forecasts Chewy will gain market share from competitors, supported by hardgoods, product mix shifts, consumables, AutoShip, and efficient marketing. JPMorgan projects second-quarter net sales of $3.088 billion, up 8% year-over-year, and fiscal 2025 sales of $12.45 billion, representing 7% year-over-year growth excluding the 53rd week impact.
JPMorgan expects Chewy’s adjusted EBITDA margins to reach 5.5% in fiscal 2025, an increase of 66 basis points year-over-year, with free cash flow of $539 million. The firm’s December 2025 price target of $47 is based on approximately 24 times its 2026 estimated adjusted EBITDA of $787 million. InvestingPro analysis reveals the company maintains strong financial health with an Altman Z-Score of 6.95 and holds more cash than debt on its balance sheet. Investors seeking deeper insights can access 15 additional ProTips and comprehensive valuation metrics through InvestingPro’s detailed research report, available for over 1,400 US stocks.
In other recent news, Chewy Inc. has seen a series of analyst upgrades and increased price targets following its recent earnings report and strong performance. Morgan Stanley (NYSE:MS) raised its price target to $50 from $39, citing strong active customer growth and projecting improved EBITDA margins for 2025 and 2026. Jefferies also increased its price target to $44, noting a strong start to 2025 and improvements in key metrics, although it maintained a Hold rating. Meanwhile, Goldman Sachs lifted its target to $48, highlighting better-than-expected net sales and active customer additions, with optimism about market share gains through 2025. Citi raised its price target to $49, emphasizing Chewy’s growth outlook and potential for margin expansion, viewing recent stock weakness as a buying opportunity. Chewy’s strategic initiatives, including Autoship sales and the expansion of its Vet Care clinics, have contributed to the company’s positive trajectory. Despite these upgrades, Chewy did not adjust its full-year revenue guidance, though it pointed investors toward the upper half of its existing range. Analysts from these firms express confidence in Chewy’s ability to continue its growth and market share gains.
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