Analyst Doug Anmuth of J.P. Morgan reiterated a Buy rating on Chewy (CHWY – Research Report), with a price target of $40.00.
Doug Anmuth has given his Buy rating due to a combination of factors including Chewy’s strong execution and growth in active customers. The company has returned to year-over-year active customer growth for the first time in approximately two years and expects this trend to continue into FY25. Chewy’s guidance for net sales growth of 6-7% in FY25, excluding the 53rd week, reflects its ability to gain market share in the pet industry, which is projected to grow by 3.5-4.5%.
Additionally, Anmuth highlights the company’s profitability ramp, driven by sponsored ads, product mix, automation, and scale benefits, with projected adjusted EBITDA margins of 5.6% in FY25. Chewy’s strong position in the non-discretionary pet category, with 85% of net sales from such products and over 80% from Autoship customers, provides a defensive stance against macroeconomic headwinds. Despite a slight decrease in net sales and gross profit estimates, the adjusted EBITDA estimate has increased, supporting the reiterated Overweight rating and a December 2025 price target of $40.
In another report released yesterday, Morgan Stanley also maintained a Buy rating on the stock with a $40.00 price target.