Chewy (CHWY – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Bill Kerr from TD Cowen reiterated a Buy rating on the stock and has a $45.00 price target.
Bill Kerr has given his Buy rating due to a combination of factors that highlight Chewy’s strong financial performance and growth potential. The company is expected to report a significant increase in revenue for the fourth quarter of 2024, driven by robust Autoship sales, which are anticipated to grow by 15.5% year-over-year. This growth aligns with both consensus estimates and the high end of the company’s guidance.
Additionally, Chewy’s gross margins are projected to improve, reaching 29.3% compared to 28.2% in the same quarter the previous year, supported by advertising revenue growth. The EBITDA is also expected to rise significantly, showing a 36.9% year-over-year increase. Despite a slight decrease in revenue forecasts for the first quarter of 2025, the company’s long-term prospects remain strong, with stable EBITDA projections and continued margin expansion. These factors collectively support the Buy rating as Chewy demonstrates resilience and potential for continued growth in the pet industry.
In another report released on March 17, Wedbush also maintained a Buy rating on the stock with a $39.00 price target.