Bank of America Securities analyst Mike McGovern reiterated a Buy rating on Chewy yesterday and set a price target of $46.00.
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Mike McGovern has given his Buy rating due to a combination of factors including Chewy’s impressive third-quarter performance and strategic initiatives. The company reported a revenue increase of 8.3% year-over-year, surpassing market expectations, and demonstrated strong marketing efficiency gains. Chewy’s EBITDA margin also exceeded projections, indicating effective cost management and profitability improvements.
Additionally, the Chewy+ program has shown significant potential, contributing to higher order frequency and increased average order values. Despite a recent price hike for membership, the program continues to perform well, with a substantial portion of members opting for paid subscriptions. These factors, along with Chewy’s ability to capture market share and drive long-term margin expansion through initiatives like sponsored advertising and private label products, underpin McGovern’s positive outlook and Buy rating.
McGovern covers the Consumer Cyclical sector, focusing on stocks such as Carvana Co, DoorDash, and CarMax. According to TipRanks, McGovern has an average return of 6.4% and a 48.62% success rate on recommended stocks.
In another report released today, Goldman Sachs also maintained a Buy rating on the stock with a $52.00 price target.