Morgan Stanley analyst Nathan Feather maintained a Buy rating on Chewy (CHWY – Research Report) yesterday and set a price target of $40.00.
Nathan Feather has given his Buy rating due to a combination of factors that highlight Chewy’s strong market position and potential for growth. Chewy has demonstrated impressive execution, capturing market share in a stable macroeconomic environment as customer growth has returned. The company has shown significant revenue acceleration and margin expansion, with customer additions exceeding expectations, driven by improved marketing efficiency.
Feather notes that Chewy’s financial performance, including a high EBITDA margin and positive revenue guidance, supports a favorable outlook. Despite a slight decline in gross margin due to seasonal factors, the company’s consistent ability to meet or exceed margin guidance over multiple quarters underscores its operational strength. With multiple avenues for outperformance and a conservative initial guidance for FY25, Feather believes Chewy offers the best risk-reward profile in the small to mid-cap e-commerce sector, justifying the Buy rating.
In another report released today, J.P. Morgan also reiterated a Buy rating on the stock with a $40.00 price target.
Based on the recent corporate insider activity of 48 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of CHWY in relation to earlier this year.