Chewy upgraded to Outperform at Wedbush as company ‘turns corner’

As previously reported, Wedbush analyst Seth Basham upgraded Chewy to Outperform from Neutral with a price target of $55, up from $35. The firm expects acceleration in net adds and continued material improvement in EBITDA margins as Chewy "turns the corner." The analyst tells investors in a research note that the resilient pet sector should continue to benefit from steady demand for consumables in 2023 and less pressure from hardgoods sales against an easy comparison. Wedbush expects Chewy’s gross customer additions to rise modestly in 2023, helping fuel future growth, and sees FY23 customer churn sharply moderating.