Chewy Inc. (CHWY) PT Raised to $42 at TD Cowen

TD Cowen analyst William Kerr raised the price target on Chewy Inc. (NYSE: CHWY) to $42.00 (from $39.00) while maintaining a Buy rating.

The analyst commented: "Solid 4Q Print & Strong FY26 Margin Outlook Amid Slower Industry Backdrop; Chewy 4Q25 revenue was in-line with expectations, while EBITDA beat consensus by ~1%. FY26 guide was solid as revenue bracketed the street and the implied EBITDA outlook beat consensus by ~3% at the midpoint, driven by revenue growth and opex leverage. We trimmed our revenue outlook by ~1%, while raising our LT EBITDA forecast by ~5%. Shares were up 13%. PT to $42, reiterate Buy rating.

Chewy expects gross margins, which peaked in 2Q25, to return to a more normalized historical cadence in FY26 as the benefits from the growth of the ad business begin to stabilize. Meanwhile, mgmt believes that SG&A will remain roughly stable as a percentage of revenue throughout the year. G&A leverage is expected to be supported by the ongoing ramp of the company's automated fulfillment center in Houston as well as efficiencies from AI that they believe will lower their cost to serve."

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