Chewy downgraded to Hold from Buy at Deutsche Bank

Deutsche Bank analyst Lee Horowitz downgraded Chewy to Hold from Buy with a price target of $35, down from $41. Users returned to declines in the Q4, with Chewy seeing users decline by 120,000 in the quarter, the analyst tells investors in a research note. The company’s outlook for 2023 suggests that while users will flip positive this year, the magnitude of that user growth is "likely tepid at best," says the firm. It believes investors need confidence in the company’s user growth trajectory to justify stock upside, and believes "that is in short supply for Chewy at the moment." Deutsche awaits signs of more sustainable user growth and a return toward margin expansion before growing more constructive on the shares again.