By Christiana Sciaudone
Investing.com -- Chewy (NYSE:CHWY)'s up 7% as we thank our mutts for their unconditional love.
Credit Suisse (SIX:CSGN) bumped its price target on the online pet supplier to $121 from $104 after hosting investor meetings with the chief executive and financial officers. The firm maintained a buy-equivalent rating on the stock.
Management emphasized accelerated shifts toward online pet spending, more spend per pet and growing pet ownership, according to analyst Eric Wilson Wright, StreetInsider reported.
Chewy reported 40% growth in the third quarter from a year earlier and a 40% increase in new pet profiles for puppies and kittens, which is 1.6 times the historical trend, according to StreetInsider.
The company sees the status quo as "durable" and representative of "dynamics that were already underway pre-pandemic, such as the shift of pet spending to online," Credit Suisse said.
"The online penetration of the U.S. pet spending market in 2020 was expected to be 22% of the estimated $99 billion market, but penetration has increased to 27% - 30% of the market over the course of the year, a metric CHWY expects to reach 35%-45% longer-term," Wilson Wright said, citing information from Packaged Facts.
Shares are up 220% since the company's initial public offering in June 2019.
Chewy's sales soared in 2020, but the company has yet to turn a profit.