Chewy Inc (NYSE:CHWY) shares are trading higher Thursday after Raymond James upgraded the stock to Outperform and set a $28 price target.
Raymond James analyst Rick Patel argues that Chewy's recent sell‑off after its fiscal third‑quarter earnings release has created an appealing entry point, CNBC reported.
Growth Tailwinds
Patel sees a healthy consumer backdrop heading into 2026, with steady demand supporting Chewy's outlook. He also expects active customer growth to benefit from organic expansion, continued digital adoption and the company's growing network of veterinary clinics. He's particularly bullish on Chewy's vet‑clinic strategy.
"We consider Chewy in the developmental stages of scaling Chewy Vet Clinics (CVC). This initiative unlocks a $25B services segment of the $47B U.S. pet health market," Patel said.
Patel also emphasized Chewy's resilience in tougher market conditions. Autoship customers — who tend to be extremely loyal — account for roughly 83% of revenue. Meanwhile, essential categories like consumables and healthcare make up about 90% of annual sales.
"While Chewy has compelling revenue drivers, it also has an attractive defensive positioning," he wrote. "We view this as protecting CHWY in a downside event."
Analyst Sentiment Remains Supportive
Chewy has received several upgrades and maintained ratings from different analysts over the recent months. On Jan. 13, Morgan Stanley maintained its Overweight rating, increasing the target from $48.00 to $51.00.
In December, three major ratings were issued. Goldman Sachs maintained its Buy rating, boosting the target from $44.00 to $52.00. Barclays also kept its Overweight recommendation with an increased target of $52.00, up from $47.00. Meanwhile, Needham reiterated its Hold rating for Chewy, though specific target prices were not disclosed.
CHWY Price Action: Chewy shares were up 4.18% at $25.20 at the time of publication on Thursday, according to Benzinga Pro.
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