Raymond James has moved Chewy Inc. (NYSE:CHWY) to an Outperform rating from Market Perform and pegged a new price target of $28.00, bringing its view into closer alignment with a broader analyst consensus that trends toward Buy recommendations.
The decision follows a notable share-price drop of roughly 33 percent since Chewy reported third-quarter results, a period during which the S&P 500 remained essentially flat. Raymond James highlighted the change in market sentiment as creating an entry point, noting that on 2027 estimates the company is trading at an enterprise value to EBITDA multiple near 8 times, well below a three-year average multiple of about 22 times.
On fundamentals, the firm projects fiscal 2026 revenue growth of around 7 percent year-over-year and expects EBITDA margins to expand by approximately 80 basis points to reach 6.5 percent. Raymond James indicated both that these projections sit roughly in line with consensus estimates and that there is room for upside relative to those expectations.
The analyst team pointed to concerns tied to the company’s fiscal 2026 guidance as a driver of the recent stock weakness, and they signaled that the initial guidance may be conservative. Raymond James framed the combination of depressed expectations plus the potential for revenue and margin improvement as offering an attractive risk-reward profile for investors focused on the pet products retailer.
Analysis from InvestingPro, referenced by the firm, supports the view that Chewy appears undervalued under its Fair Value model and also notes the company carries more cash than debt on its balance sheet. Subscribers to InvestingPro can access a comprehensive Pro Research Report on Chewy and 16 additional ProTips for deeper valuation and financial context.
Recent operational and analyst developments
Chewy’s latest quarterly results were described as strong: the company beat consensus expectations with revenue up 1 percent and EBITDA rising 7 percent. UBS reported an 8.3 percent increase in sales for the quarter that outperformed both Chewy’s guidance and consensus, and UBS highlighted an 18 percent margin flow-through for the period.
Other firms have also updated their views. TD Cowen raised its price target to $48 while maintaining a Buy rating. UBS moved its target to $42 and kept a Neutral stance. Mizuho reiterated an Outperform rating with a $50 target, referencing upbeat commentary from CEO Sumit Singh regarding fourth-quarter customer additions and prospects for profitability next year. Piper Sandler continued to rate Chewy Overweight despite flagging concerns about the 2026 guidance and the stock’s notable year-to-date underperformance.
Management news
On the executive front, Chewy announced the planned retirement of Chief Technology Officer Satish Mehta effective February 2026 and that a search for his successor will commence. The company has made no further personnel detail public as part of that announcement.
Taken together, recent analyst revisions, the company’s quarterly performance, balance sheet characteristics, and the planned CTO transition comprise the set of strategic and financial developments investors are evaluating as they reassess Chewy’s outlook for 2026 and beyond.