Chewy upgraded to Outperform from In Line at Evercore ISI

Evercore ISI upgraded Chewy (CHWY) to Outperform from In Line with a price target of $47, up from $34. The firm cites six reasons, including industry reports, channel checks, and proprietary consumer survey work that suggests that the U.S. pet industry has stabilized after two years of decline; the view of Chewy as “one of the clear Online Pet leaders” with “consistently very impressive Sat Scores,”; a belief that the above two factors are bringing Chewy back into a cycle of sustained net adds growth; a path for consistent and material gross margin expansion; a path for consistent and material EBITDA margin expansion; and an improved free cash flow generation story.