Chewy named a ‘Top Pick’ at Morgan Stanley

Morgan Stanley makes Chewy (CHWY) the analyst’s “Top Pick” and raised the firm’s bull case following a deep dive on the vet clinic opportunity, which shows “an underpriced call option on an already compelling story.” Chewy launched its first vet clinic last year and clinics should prove to be a strong standalone segment with “compelling 4-wall unit economics,” the analyst tells investors. With clinics adding another growth vector to “an already compelling customer growth and margin story,” the firm raised its bull case valuation from $68 to $75 as it builds in a successful clinic ramp. The firm has an Overweight rating and $50 price target on Chewy shares.