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Citi raised its price target on Chewy Inc . (NYSE:CHWY) to $49 from $42 on Thursday while maintaining a Buy rating on the online pet retailer’s shares. The new target comes as the stock has seen a 14% decline over the past week, though it maintains an impressive 82% gain over the past year according to InvestingPro data.
The research firm cited Chewy’s position as a market share gainer in the resilient pet category, noting that the company’s fundamental growth and margin expansion story remains "well intact" despite recent stock weakness following first-quarter results.
Citi pointed to strong active customer growth as a factor improving the sales outlook for Chewy, adding that industry demand normalization should serve as an incremental growth driver for the company.
The firm highlighted that Chewy’s EBITDA margin has potential to double from current levels based on factors within the company’s control, making it a "compelling idiosyncratic growth story."
Citi’s price target increase was based on slightly higher EBITDA projections and a higher target multiple, with the firm viewing recent weakness in Chewy shares as "an attractive buying opportunity."
In other recent news, Chewy Inc. reported stronger-than-expected earnings for the first quarter of 2025, with adjusted earnings per share (EPS) at $0.35, surpassing analyst forecasts of $0.32. Revenue also exceeded expectations, reaching $3.12 billion against a projected $3.08 billion. Despite these positive financial results, Chewy did not adjust its full-year 2025 revenue guidance but directed investors towards the upper half of the existing range. Analyst firms have responded to these developments with Goldman Sachs raising its price target for Chewy to $48, maintaining a Buy rating, while CFRA increased its price target to $53, upholding a Strong Buy rating. Both firms highlighted Chewy’s strong sales growth and strategic initiatives, such as the expansion of its Autoship program and Chewy Vet Care clinics. CFRA noted a 3.8% year-over-year growth in active customer numbers and an expanded EBITDA margin by 120 basis points. Chewy’s strategic moves, including its Chewy+ membership program and sponsored advertising, were also noted as contributing factors to its robust performance.
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