Chewy Inc. (CHWY) PT Raised to $49 at Citi

Citi analyst Steven Zaccone raised the price target on Chewy Inc. (NYSE: CHWY) to $49.00 (from $42.00) while maintaining a Buy rating.

The analyst comments "The weakness in CHWY shares present an attractive buying opportunity, in our view. Despite a headline 1Q sales & EBITDA beat, the slight GM miss vs. the Street (albeit still a beat vs. our model), the higher-than-expected SG&A, and the lack of guidance raise were all reasons for the stock to see a pullback. That’s all in the rear-view mirror now. We believe the fundamental growth and margin expansion story is well intact with the sales outlook improving based on strong active customer growth. Bigger picture, CHWY remains a market share gainer in the resilient pet category, industry demand normalization should be an incremental growth driver, and the EBITDA margin path is still a double from current levels based on drivers within Chewy’s control. Simply put, CHWY remains a compelling idiosyncratic growth story. We reiterate Buy and raise our TP to $49 based on slightly higher EBITDA and target multiple."

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