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Chewy Inc (NYSE: ) has had a terrible 2023 but the coming year will likely be a different story altogether, says Kaumil Gajrawala – a Jefferies analyst.
Chewy stock has 25% upside
Gajrawala assumed coverage of the online pet food retailer with a “buy” rating this morning and said its shares could climb to $27 – up roughly 25% versus its their previous close.The analyst sees Chewy stock as a tail-wagging opportunity with multiple growth and margin initiatives in place.He remains constructive on the New York listed firm even though its revenue came in shy of Street estimates in its .Gajrawala expects Chewy to improve its sales by 5.0% in FY24 and achieve an 8.0% plus growth by FY27. The retail stock is currently down more than 50% versus its year-to-date high.
Why else is he bullish on Chewy?
The Jefferies analyst recommends owning Chewy Inc also because he’s convinced that it’s somewhat insulated from the macroeconomic pressures. His research note reads:
Chewy indexes to high income groups. ~76% of sales are from Autoship customers, and consumables make up lion’s share of sales. Weakness in industry is less likely to impact Chewy.
Kaumil Gajrawala expects the advertising business, pet health, and automation to unlock upside for the Chewy stock in the near term.On Tuesday, he initiated PetIQ at “buy” as well. His $22 price target on the pet health company suggests a 16% upside from here.More By This Author:Lufthansa To Buy Boeing 737 For The First Time Since 1995 Eurozone’s Inflation Has Dropped – So Will Interest Rates Go Down In 2024? Nikola Stock Analysis: Dark Chapter Closes, Shorting Is Risky
