It’s time to buy Chewy at an attractive entry point, according to Oppenheimer. Analyst Rupesh Parikh initiated coverage of the online pet supplies retailer with an outperform rating. Shares of Chewy are down roughly 36% this year, underperforming the 21% decline in the S & P 500 over the same time period. “We believe the recent pullback represents an attractive entry point for longer-term players,” Parikh wrote in a Thursday note. “Over time, we believe CHWY’s attractive value proposition and expansion into new areas such as healthcare and services should help the company drive share gains and further consolidate pet spend.” Oppenheimer’s $42 price target represents about 10% upside from Thursday’s closing price of $37.94. The stock is up slightly in Friday premarket trading. The analyst cited a strong balance sheet, and the company having reached profitability in the first half of this year, as strengths in a market where investors are shedding companies without a path to profitability. “CHWY was already profitable on a net income basis during 1H22. We model the company reaching net income profitability on an annual basis in FY24 (Jan. 2025),” read the note. “We expect a volatile trade to continue from here and would take advantage of any potential dips,” Parikh wrote. —CNBC’s Michael Bloom contributed to this report.
