Chewy’s Strong Market Position and Growth Potential Justify Buy Rating

In a report released today, Curtis Nagle from Bank of America Securities maintained a Buy rating on Chewy (CHWY – Research Report), with a price target of $40.00.

Curtis Nagle has given his Buy rating due to a combination of factors that highlight Chewy’s strong market position and potential for growth. Chewy’s revenue and EBITDA estimates for the fourth quarter are above market expectations, indicating robust performance despite a challenging industry environment. The company has consistently outperformed industry trends, suggesting resilience and a competitive edge.
Additionally, Chewy’s strategic focus on higher-margin areas such as Sponsored Ads and Healthcare is expected to drive future profitability. The management’s confidence, as reflected in their commentary, and the company’s ability to leverage its fixed operating expenses further support the positive outlook. Despite a soft start to 2025, Chewy’s subscription-like business model, minimal exposure to discretionary spending, and lack of debt position it as a stable investment, justifying the Buy rating.