Chewy: Solid Execution and Margin Upside in a Resilient Category, but Competitive Pressures Justify Maintaining Hold

Needham analyst Bernie McTernan has reiterated their neutral stance on CHWY stock, giving a Hold rating today.

Bernie McTernan has given his Hold rating due to a combination of factors, including Chewy’s solid recent execution and slight upward revisions to his 2026 revenue and adjusted EBITDA forecasts. He notes that the company continues to gain market share in a generally soft macro environment and has outperformed margin expectations in the latest quarter, while management’s margin outlook for 2026 aligns with his prior assumptions.

At the same time, McTernan sees the overall story as largely unchanged, which tempers the case for a more aggressive rating upgrade. He acknowledges Chewy’s potential to regain a premium valuation given its relatively resilient category and early progress in realizing AI-driven cost efficiencies, but he remains cautious about intensifying long-term competition from major global retailers and emerging agentic commerce models.

McTernan covers the Consumer Cyclical sector, focusing on stocks such as DraftKings, Rush Street Interactive, and Super Group (SGHC). According to TipRanks, McTernan has an average return of 0.0% and a 40.84% success rate on recommended stocks.

In another report released today, TipRanks – OpenAI also reiterated a Hold rating on the stock with a $27.00 price target.