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Investing.com - BofA Securities maintained its Buy rating and $49.00 price target on Chewy Inc . (NYSE:CHWY) Wednesday, citing improving trends in the pet retail industry.
According to BofA’s aggregated debit and credit card data, spending at pet retailers improved in May, with the industry now flat year-over-year compared to a 4% decline in the first quarter. The firm noted that industry trends have steadily improved from a trough in June 2024.
BofA expects gradual gains through the remainder of the year, supported by easy comparisons, normalizing inflation, and pet ownership trends. The firm highlighted that data from Shelter Animals Count indicates adoptions remain stable compared to the beginning of the year.
The research firm views stable adoption rates as an important indicator of consumer health and a key driver of pet household formations, which Chewy management has described as currently flat year-over-year.
Long-term, BofA expects the pet industry to return to consistent mid-single digit growth driven by a combination of price and volume factors, supporting its continued positive outlook on Chewy’s business prospects.
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