Pet food retailer Chewy (CHWY) is set to release its Q2 earnings report tomorrow, September 10. Wall Street expects the company to report earnings of $0.14 per share on revenues of $3.08 billion. Ahead of the Q2 print, Mizuho analyst David Bellinger upgraded Chewy to Outperform from Neutral and raised his price target to $50 (20.13% upside) from $44, pointing to a more attractive risk-reward profile after the recent stock pullback. Over the past three months, Chewy shares have declined by more than 10%.
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Analyst Sees Growth Ahead for CHWY Stock
The 4-star analyst expects Chewy to deliver another strong quarter when it reports Q2 results on Wednesday, along with an update to its FY25 guidance. He anticipates modest increases to both revenue and adjusted EBITDA forecasts, which he sees as positive catalysts for the shares.
He pointed out that customer growth remains solid, with net additions continuing to surpass 100,000 per quarter. He also noted that earlier pressure on margins should begin to fade as the impact of initial autoship discounts lessens. In addition, Bellinger noted that Chewy spent heavily in the first quarter, but he expects operating leverage to improve later in the year.
Bellinger emphasized that Chewy represents a compelling medium- to long-term opportunity. He highlighted the company’s initiatives in advertising, automation, and veterinary clinics as important growth drivers that can strengthen the business over time.
Is CHWY Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on Chewy stock based on 19 Buys and four Holds assigned in the past three months, as indicated by the graphic below. Furthermore, the average Chewy price target of $47.80 per share implies 14.85% upside potential.
