Chewy initiated with a Buy at Roth MKM

Roth MKM analyst David Bellinger initiated coverage of Chewy with a Buy rating and $52 price target. The "building strength of Chewy’s core business stands out," says the firm, which contends that "the most overlooked" part of a Chewy investment thesis is its very narrow and highly predictable revenue trajectory, which allows for better profitability within its core $7-8B autoship business. The company can lean on this to further invest into higher margin adjacencies, which should fuel profitability, Roth argues.