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On Thursday, TD Cowen adjusted its price target for Chewy Inc . (NYSE:CHWY) shares, bringing it down to $44 from the previous $45, while still holding a Buy rating on the stock. The adjustment followed the company’s fourth-quarter results, which surpassed consensus expectations for both revenue and EBITDA. The performance was attributed to an increase in Active Customers and better-than-expected Non-GAAP operating leverage, which balanced the slower growth in gross margins of 29.2%. According to InvestingPro data, the company maintains a healthy financial profile with a strong Altman Z-Score of 6.16, indicating low bankruptcy risk.
Chewy’s guidance for the first quarter was also received positively, with revenue figures exceeding consensus projections and profitability surpassing TD Cowen’s estimates. Looking ahead, the company’s fiscal year 2025 outlook appears robust, with projections aligning closely with market expectations regarding sales and margins. InvestingPro analysis reveals that four analysts have recently revised their earnings estimates upward, with the company expected to achieve EPS of $1.35 in fiscal year 2025.
The firm’s analysts have revised their financial model for Chewy, leading to an increase in their EBITDA forecast. However, this was counterbalanced by a rise in the anticipated share count, prompting the slight reduction in the price target. Despite this change, TD Cowen reaffirmed its Buy rating, signaling continued confidence in the online retailer of pet food and products. With a market capitalization of $13.9 billion and a Return on Assets of 13.6%, Chewy demonstrates solid operational efficiency. For deeper insights into Chewy’s valuation and growth prospects, including 13 additional ProTips and comprehensive financial analysis, check out the full research report on InvestingPro.
Chewy’s recent financial results and the subsequent guidance have provided a clearer picture of the company’s position and potential in the market. The firm’s analysis suggests that Chewy is maintaining a solid trajectory in terms of customer growth and operational efficiency, which could bode well for its future performance. The company’s revenue growth of 3.5% and moderate debt levels support its stable financial position, while analyst consensus maintains a bullish outlook with price targets ranging from $31 to $47.
In other recent news, Chewy Inc. announced its fourth-quarter earnings, which surpassed expectations with revenue exceeding guidance and stronger-than-anticipated adjusted EBITDA margins. RBC Capital Markets maintained an Outperform rating with a $42 price target, highlighting increased net customer additions and improvements in margin initiatives. CFRA also adjusted its price target for Chewy to $42, down from $45, while maintaining a Strong Buy rating, noting the company’s solid financial footing and expansion in profit margins. UBS raised its price target to $36 from $34, maintaining a Neutral rating, and acknowledged Chewy’s progress toward sustainable growth despite mixed results in gross margin growth. Needham reiterated its Hold rating, recognizing Chewy’s strategic investments in supply chain and customer experience that have led to stronger-than-anticipated outcomes. Goldman Sachs reduced its price target to $40 from $45, sustaining a Buy rating, and emphasized Chewy’s strategic initiatives like the Autoship program and healthcare offerings as key growth drivers. These developments reflect Chewy’s ongoing efforts to enhance its operations and capitalize on growth opportunities.
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