Chewy stock price target raised to $49 at BofA Securities

On Friday, BofA Securities analyst Curtis Nagle increased the price target for Chewy Inc . (NYSE:CHWY) shares to $49.00, up from the previous $44.00, while reiterating a Buy rating on the company. The stock, currently trading at $44.41, has shown remarkable strength with a 106% return over the past year and is approaching its 52-week high of $45.01. The adjustment comes ahead of Chewy’s first-quarter earnings report, which is scheduled for release on June 11, with a conference call set for 8 a.m. ET that day. According to InvestingPro analysis, the stock is currently trading above its Fair Value, with analyst targets ranging from $27 to $50.

Nagle’s projection for Chewy’s first-quarter revenue stands at $3.09 billion, slightly above the consensus estimate of $3.08 billion, indicating an anticipated year-over-year growth of 7.4%. This forecast aligns with the company’s recent performance, as InvestingPro data shows a trailing twelve-month revenue of $11.86 billion with a 6.4% growth rate. However, the analyst’s estimate for EBITDA is $182 million, which is 4% lower than the Street’s expectation of $190 million. The forecasted discrepancy is largely attributed to Chewy’s increased advertising expenditure as the company amplifies its marketing efforts during the industry’s recovery phase.

The analyst underscored the company’s strategic investments in advertising, which appear to be paying off. Chewy’s Chief Financial Officer, Mario Reeder, has observed a rise in new customer acquisitions and reactivations, coupled with a decline in customer churn rates. For the first quarter, Nagle anticipates that Chewy’s active customer base will expand by 3.2% year-over-year to reach 20.6 million, aligning with Street predictions and outperforming a market that has otherwise shown flat growth.

Nagle also suggested that there could be a potential increase in net customer additions, driven by Chewy’s targeted advertising campaigns and the strength of its mobile application, as evidenced by the company’s performance in the fourth quarter.

In other recent news, Chewy has announced that its Chief Financial Officer, David Reeder, will be leaving the company to take on a CEO role in the semiconductor industry. Reeder will remain with Chewy through the next earnings announcement in June to ensure a smooth transition. Additionally, Chewy has expanded its board by appointing Dr. Nat Goldhaber as a new independent director, increasing the board size from thirteen to fourteen members. Dr. Goldhaber’s expertise in technology and venture capital is expected to provide valuable insights to the company.

In terms of financial analysis, Citizens JMP has adjusted Chewy’s stock price target slightly downward to $39 but maintains a Market Outperform rating, citing resilience in pet-related spending even during economic downturns. Piper Sandler also expressed confidence in Chewy’s market position by maintaining an Overweight rating and a $40 price target, driven by positive trends in pet adoption and growth. The firm noted that veterinarians are optimistic about pet population growth through 2026, which aligns with Chewy’s strategic expansion into veterinary services. Chewy’s minimal exposure to tariffs, as reported by Piper Sandler, suggests the company can manage cost increases with minor pricing adjustments. These developments highlight Chewy’s ongoing strategic initiatives and market positioning in the pet industry.

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