On Thursday, Goldman Sachs adjusted its outlook on Chewy Inc . (NYSE:CHWY), reducing the price target to $32 from the previous $36, while maintaining a Buy rating on the company's stock. The adjustment follows Chewy's latest earnings report, which highlighted a solid operating performance in the fourth fiscal quarter amidst a challenging environment for the pet industry.
The earnings report revealed that Chewy's revenue slightly exceeded the upper end of their guidance, driven by a notable 12% year-over-year growth in new and active customers. Additionally, the company surpassed expectations on adjusted EBITDA. Chewy's management provided an initial fiscal year 2024 guidance that aligns with revenue estimates and forecasts a stabilization in active customer numbers throughout the year.
Despite the ongoing market challenges, Chewy is expected to continue gaining market share over time. The company has been executing a range of strategic initiatives effectively, including Chewy Health, advertising efforts, and plans for international expansion. These factors contribute to the firm's positive outlook on the stock.
Goldman Sachs' revised price target reflects updates to forward operating estimates based on Chewy's earnings report and management's forward-looking statements. The new 12-month price target of $32 takes into account these recent developments and the company's strategic direction.
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