Shares of Chewy Inc (NYSE: CHWY) are in focus on Monday after a Needham analyst said the “defensive” name down 35% year-to-date is a “buy”.
Chewy stock has significant upside from here
Anna Andreeva sees upside to $55 a share in Chewy on easing supply constraints and company-specific initiatives aimed at driving profitability. The analyst wrote:
After four quarters of missing consensus EBITDA and three quarters of missing consensus Sales, CHWY beat expectations in 1Q22, and we think the positive momentum continued into 2Q22.
She’s convinced the pet category can weather the ongoing inflationary pressures as pet spending does not depend on state of the economy at large. Interestingly, the NYSE-listed firm has already gained more than 50% since June 1st.
Jim Cramer: Chewy has paid its dues
She said the pet space looks “rational” moving forward and dubbed CHWY “inexpensive” on EV/EBITDA basis. Agreeing to her constructive view on the eCommerce company, famed investor Jim Cramer said this morning on CNBC’s “Squawk on the Street”:
Chewy has made a nice recovery. That last quarter was business as usual. They have not lost customers, it’s impressive. It’s a company that has paid its dues, so to speak. Pets remain something the great disease made it so you have pets.
Earlier this month, the American pet products retailer reported a surprise profit for its fiscal first quarter and gave better-than-expected guidance for the full year.
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Source: https://invezz.com/news/2022/06/27/needham-chewy-stock-has-another-45-upside-from-here/