Mizuho analyst David Bellinger reiterated a Buy rating and a $50 price target on Chewy (CHWY) stock after the online pet products supplier announced it is acquiring vet-care platform Modern Animal. Bellinger called the move “somewhat mixed,” noting that while the deal boosts Chewy’s veterinary expansion, it also adds complexity to what was expected to be a “clean and lean operating year in FY26.”
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Chewy Expands into Physical Vet Care
With this acquisition, Chewy is expanding further into pet healthcare. Modern Animal is a fast‑growing vet‑care platform known for its membership model, tech‑enabled clinics, and customer‑friendly service.
The deal gives Chewy an immediate physical footprint of about 30 clinics, expanding its reach beyond online pharmacy, telehealth, and pet wellness products.
Bellinger expects the deal to add at least $125 million in annual revenue and remain EBITDA‑neutral in 2026. He also said Chewy’s “asset‑light” approach suggests the company may eventually move toward licensing or franchising.
Analyst Sees Strategic Upside but Warns of Complexity
Bellinger said the deal makes strategic sense for expanding Chewy’s vet‑clinic network, but it also adds complexity. Chewy is now integrating two acquisitions at the same time, which he says “puts a lot on management’s plate” in a year that was expected to be more streamlined.
It is worth mentioning that in October 2025, CHWY agreed to acquire SmartEquine in an all‑cash deal. SmartEquine is a provider of equine health products, proprietary subscription-based supplements, and personalized nutrition.
Overall, Bellinger sees the deal as a positive step for Chewy’s long-term strategy. Physical vet clinics are expected to help strengthen customer relationships and create more recurring revenue.
Buybacks Still in Focus
Alongside the acquisition, Chewy’s management authorized an additional $500 million for its share repurchase program, a decision Bellinger views favorably from a free cash flow standpoint. He noted that Chewy can still buy back a meaningful amount of stock this year while expanding its vet-care footprint.
He said the mix of buybacks and strategic expansion supports the long‑term bullish outlook, even if integrating the new acquisitions adds some near-term complexity.
Is Chewy a Good Stock to Buy Right Now?
Turning to Wall Street, CHWY stock has a Strong Buy consensus rating based on 15 Buy and two Hold recommendations. The average Chewy stock price target of $41.73 implies an upside potential of 55.83%.
