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Chewy (NYSE:CHWY) pushed higher in early trading on Friday after Piper Sandler upgraded the online pet retailer to an Overweight rating from Neutral.
“While top line trends are likely still muted, CHWY appears to be at a profitability inflection point aided by both gross margin expansion (mix shift to higher margin revenue streams, well controlled discounting—2Q24 below last year’s levels on average, according to our checks) and SG&A leverage (automation and efficiency gains),” updated analyst Anna Andreeva.
Andreeva and her team think it is too early to tell if new pet adoption trends have stabilized, but think that any degree of positive trends would be constructive for Chewy (CHWY) shares.
Piper Sandler boosted its price target on Chewy (CHWY) to $35 from $22.
Shares of Chewy (CHWY) were up 2.85% in premarket trading to $26.34 vs. the 52-week range of $14.69 to $39.10. Short interest on CHWY stands at 10.8% of the total float.
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