Chewy poised for earnings report; analysts optimistic despite recent revenue miss

In the United States, Chewy, Inc. is set to announce its earnings results for the third quarter on December 4, 2024. Analysts predict the company will report earnings of 23 cents per share, which reflects an increase from 15 cents per share recorded in the same quarter last year. Furthermore, the company is anticipated to generate revenue of $2.86 billion, up from $2.74 billion a year earlier. Despite facing a revenue miss in the previous quarter, Chewy has successfully surpassed revenue estimates in seven of the past ten quarters. Chewy's stock closed at $33.62, marking a slight decline of 0.03% on December 3, 2024. Analysts have recently reassessed their ratings and price targets for the stock. Piper Sandler analyst Peter Keith maintained an Overweight rating with a price target adjustment from $35 to $40. Similarly, Baird's Justin Kleber also kept an Outperform rating while raising the price target to $40. Deutsche Bank’s Lee Horowitz adjusted the price target from $24 to $28, maintaining a Hold rating. In a notable move, B of A Securities analyst Curtis Nagle upgraded the stock from Underperform to Buy while also increasing the target price from $24 to $40. Nagle expressed confidence in the company's expense management leading to potential earnings growth, linking it to stabilizing industry trends. Additionally, online traffic to Chewy's website has markedly increased compared to the previous year, indicating potential market share growth. Analyst commentary pointed to Chewy’s strong positioning in the pet care sector, capturing approximately 33% of the online market share, which suggests a bright outlook for future performance. The pet care sector is witnessing improvements, and Chewy is well-positioned to leverage new high-margin growth items. Analysts believe that the growth in both the online pet sales channel and Chewy's diversification strategies into healthcare can serve as significant growth drivers. The upcoming earnings report is keenly anticipated by investors as it could provide insights into Chewy's operational performance amid evolving market conditions and consumer trends.