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Investing.com - Piper Sandler has reiterated its Overweight rating and $48.00 price target on Chewy Inc . (NYSE:CHWY) despite the stock’s 15% decline since early June. According to InvestingPro data, the stock has shown remarkable resilience with a 51% return over the past year, though it currently trades at a P/E ratio of 43x.
The research firm noted that Chewy shares have underperformed compared to its broader coverage universe, which has remained flat during the same period. Investor concerns emerged following the company’s Q1 2025 earnings report, where Chewy maintained rather than raised its annual sales and EBITDA guidance. InvestingPro analysis shows that 10 analysts have recently revised their earnings estimates upward for the upcoming period, with analyst targets ranging from $33 to $52.
Piper Sandler pointed to gross margin misses in the past two quarters, though it acknowledged these had "legitimate explanations" including weather impacts in Q4 2024 and one-time factors in Q1 2025.
For the upcoming Q2 2025 earnings release on September 10, the firm outlined three key metrics bulls want to see: net additions at least matching the consensus estimate of 20.7 million, gross margin stability, and an increase to the annual margin guidance.
The research note also observed that Chewy’s stock valuation has decreased by 2-3 points in EV/EBITDA year-to-date, currently trading at 20x, and mentioned that Chewy maintained its promotional strategy during Amazon (NASDAQ:AMZN)’s recent four-day Prime event rather than adjusting its approach.
In other recent news, Chewy Inc. has garnered attention with expectations of strong fiscal second-quarter 2026 results. Citizens JMP has maintained its Market Outperform rating on Chewy, with a price target of $48.00, based on anticipated better-than-expected performance. The firm highlights the ramp-up of veterinary clinics and growth in advertising as key factors. Barclays (LON:BARC) also reiterated its Overweight rating with a $50.00 price target, despite a recent 14% decline in Chewy’s stock. Barclays noted that the stock’s performance contrasts with the broader NASDAQ’s 10% gain, and the firm was surprised by the continued weakness following a significant stock sale by BC Partners.
Meanwhile, BofA Securities has maintained its Buy rating and $49.00 price target, emphasizing Chewy’s growth potential in the veterinary care and pharmaceuticals market. This market is valued at $40 billion, according to the American Pet Products Association. Additionally, a survey by RBC Capital Markets revealed that Chewy’s popularity among pet owners has increased, with 48% of pet owners shopping at Chewy in the past year. Chewy ranked as the third most popular retailer among pet owners, following Amazon and Walmart (NYSE:WMT).
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