Bullish indicating open at $55-$60, IPO prices at $37
On Thursday, UBS analysts raised the price target for Chewy Inc . (NYSE: NYSE:CHWY) stock to $46 from $36 while keeping a Neutral rating. This adjustment comes as the company prepares for its upcoming quarterly earnings report on June 11, which analysts expect to test whether business momentum aligns with recent share price gains. According to InvestingPro data, the company has demonstrated strong financial health with an overall score of "GREAT."
Chewy shares have surged 42% year-to-date, significantly outpacing the S&P 500’s 2% increase. This rise has sparked discussions about the company’s ability to maintain profitable growth, which the market has embraced as part of an acceleration narrative.
The UBS analysts noted the importance of Chewy’s ability to sustain this growth trajectory, suggesting that each quarter’s performance needs to exceed the previous one to justify the current share valuation. The stock is currently trading at approximately 28 times its projected 2025 EBITDA.
Investors and analysts are closely monitoring Chewy’s upcoming quarterly results to determine if the company’s growth can continue at the expected pace.
In other recent news, Chewy Inc. announced the upcoming departure of CFO David Reeder, who will transition to a CEO role in the semiconductor industry after the company’s next earnings announcement. Chewy’s first-quarter earnings report is anticipated, with BofA Securities projecting revenue of $3.09 billion, slightly above the consensus estimate of $3.08 billion, and forecasting a 7.4% year-over-year growth. However, BofA Securities estimates EBITDA at $182 million, which is 4% lower than the Street’s expectation, due to increased advertising expenses. Jefferies recently downgraded Chewy’s stock from Buy to Hold, citing valuation concerns, despite raising the price target to $43. Meanwhile, BofA Securities raised its price target for Chewy to $49, maintaining a Buy rating. Citizens JMP adjusted its price target to $39, maintaining a Market Outperform rating, highlighting the resilience of pet-related expenditures even in economic downturns. Chewy has also expanded its board with the appointment of Dr. Nat Goldhaber as a new independent director, enhancing its governance and strategic oversight. These developments reflect Chewy’s ongoing efforts to strengthen its leadership and adapt to market conditions.
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