Wolfe upgrades Chewy to Outperform, sees operational efficiency gains

Wolfe Research analyst Shweta Khajuria upgraded Chewy (CHWY) to Outperform from Peer Perform with a $42 price target The firm said its upgrade is based on four key points, namely: customer growth is improving, with acceleration expected in 2025 and 2026; net sales per active customer growth will remain healthy driven by ongoing mix-shift to pet health and Autoship; several product catalysts, and; international expansion. All of these initiatives coupled with operational efficiency gains should help drive more meaningful margin expansion, the analyst tells investors in a research note.