Argus upgrades Chewy to Buy, sees internal metrics driving better results

Argus upgraded Chewy to Buy from Hold with a $30 price target. The stock has underperformed over the past quarter, falling 29% vs. a gain of 3% for the Russell 2000 index, but the company’s recent Q2 results topped consensus estimates and its internal metrics suggest better results in the coming quarters, the analyst tells investors in a research note. Argus adds that Chewy has been expanding into high-margin businesses such as pet medications, pet insurance, and sponsored ads.