A Needham analyst upgraded chewy $CHWY stock on June 27, 2022.
Needham analyst Anna Andreeva upgraded Chewy Inc (NYSE: CHWY) to Buy from Hold with a price target of $55, implying a whopping 44% upside.
Anna said the company had exceeded expectations in Q1 FY22 after missing consensus EBITDA for four quarters. She thinks the positive momentum continued in Q2 as the pet category was inelastic, with price increases sticking and improving supply chain operations and company-specific initiatives driving profitability.
The analyst noted that the headwinds from last year across the supply chain and wage/labor pressures are starting to dissipate, with sell-side estimates poised for upside.
Wedbush Upgrade For Chewy Stock Could Start Off An Analyst Upgrade Barrage
CHWY stock has exploded higher over the last week after the stock received an upgrade from Wedbush analyst Seth Basham to an outperform rating.
The analyst says that Chewy has lost more than 50% of its value year to date and is primed for a rebound on what he terms “relatively favorable” dynamics in the pet food market.
Seth said that customer churn led many investors to abandon the stock. He says this should abate “materially” in 2023. In a new research note, he wrote, “we expect gross customer add challenges to ease … as competitors adjust their advertising and acquisition strategies, and shoppers seek value in the online channel.” In his view, this should keep customer acquisition costs modest.
Over the last 5 quarters, sales have been uptrending for Chewy. Pets will need to eat regardless of economic conditions making this stock a Consumer Staples sector company.