By Sam Boughedda
Chewy (NYSE:CHWY) was started at Outperform with a $50 per share price target by JMP Securities analysts on Tuesday, with them describing the online pet retailer as a "best-of-breed platform" with an impassioned audience.
"Chewy, Inc.'s (CHWY) dominant position within pet-related retail and services positions it well to capture a highly impassioned audience that is increasingly humanizing their pets," the analysts wrote. "This behavior should continue to increase the premiumization of pets driving consumers to allocate more discretionary spend to those pets longer term."
Furthermore, they explained that compared to what is generally seen in an e-commerce marketplace, Chewy's autoship subscription model adds more predictability into future revenue, helping to warrant a premium in CHWY's multiple.
"CHWY's looming international expansion will add incremental revenue to current consensus estimates but weigh on EBITDA margin expansion near term," the analysts added. "In summary, we see upside to CHWY's multiple and estimates over the next twelve months."