Chewy’s Growth and Stability: Buy Rating Backed by Revenue and Margin Improvements
Wall Street analyst Bill Kerr from TD Cowen reiterated a Buy rating for Chewy, setting a $47.00 price target. The rating is based on expected revenue growth of 7.6% year-over-year for Q3 2025, reaching $3.10 billion, and improved gross margins of 29.8%. Despite slight reductions in long-term forecasts, Chewy's stability against tariffs and recession risks supports the positive outlook. Kerr's average return is -9.5% with a 28.57% success rate.
Chewy, the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Bill Kerr from TD Cowen reiterated a Buy rating on the stock and has a $47.00 price target.
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Bill Kerr has given his Buy rating due to a combination of factors that highlight Chewy’s potential for growth and stability. The company is expected to report a revenue increase of 7.6% year-over-year for the third quarter of 2025, reaching $3.10 billion, which aligns with both consensus expectations and the higher end of guidance. This growth is attributed to an increase in active customers and net sales per active customer, alongside a notable rise in Autoship Customer sales.
Furthermore, Chewy’s gross margins are projected to improve to 29.8%, up from 29.3% in the same quarter of the previous year, driven by advertising revenue growth and a shift towards higher average selling price goods. The expected EBITDA growth of 24.1% year-over-year, alongside a reasonable EV/EBITDA multiple of 15.1x based on 2026 estimates, supports the Buy rating. Despite a slight reduction in long-term revenue and EBITDA forecasts, the company’s relative insulation from tariffs and recession risks compared to other eCommerce platforms reinforces the positive outlook.
According to TipRanks, Kerr is an analyst with an average return of -9.5% and a 28.57% success rate.
