Chewy’s Strong Performance and Growth Potential Justify Buy Rating

Bank of America Securities analyst Curtis Nagle reiterated a Buy rating on Chewy (CHWY – Research Report) yesterday and set a price target of $49.00.

Curtis Nagle has given his Buy rating due to a combination of factors that highlight Chewy’s strong performance and potential for growth. The company reported first-quarter revenue and EBITDA figures that surpassed market expectations, driven by a notable increase in active customers and robust sales growth. Despite a slight contraction in gross margin, the overall financial health of the company remains solid, with advertising efforts contributing positively to operating leverage.
Furthermore, Chewy’s management has provided guidance for the second quarter that exceeds market estimates, indicating continued customer growth and strong sales performance. The company is on track to reach the high end of its fiscal year revenue target, and there is potential for upward adjustments as the year progresses. With expectations of significant earnings growth and solid share gains, Nagle maintains a positive outlook on Chewy’s stock, supporting his Buy recommendation.

Nagle covers the Consumer Cyclical sector, focusing on stocks such as RH, Wayfair, and Etsy. According to TipRanks, Nagle has an average return of -2.4% and a 49.05% success rate on recommended stocks.

In another report released today, Barclays also maintained a Buy rating on the stock with a $50.00 price target.