- Wedbush analyst Seth Basham upgraded Chewy Inc (NYSE:CHWY) from Neutral to Outperform and raised the price target to $35 (8% upside) from $30.
- The analyst cites favorable pet category dynamics, bottoming e-commerce trends, attractive valuation, and better risk-reward as the reasons for the upgrade.
- While Seth expects discretionary goods spending pressure to continue in the near-to-medium term, hardgoods sales comprise a comparatively small amount of Chewy’s sales mix.
- The analyst expects gross customer add challenges to ease in the second half of 2022 as competitors adjust their advertising and acquisition strategies and shoppers seek value in the online channel, thus keeping the company’s customer acquisition costs (CAC) under control.
- Price Action: CHWY shares are trading higher by 12.82% at $32.35 on the last check Tuesday.
