Chewy's Price Target Slashed to $22 as Organic Growth Falls to 5.7%
CHWY•Chewy's price target was cut to $22 from $50 after analysts forecast fiscal 2026 revenue growth slowing to 5.7%, down from 6.2% in fiscal 2025, excluding acquisitions. Earnings per share guidance was trimmed to $0.86 from $0.92, and valuation methodology shifted to a market-style earnings multiple.
1. Analyst Downgrade and Price Target Cut
MoffettNathanson downgraded Chewy’s rating to Neutral from Buy and slashed its price target to $22 from $50, citing a less compelling valuation outlook. The firm emphasized that a market-style earnings multiple is now more appropriate for a business delivering mid-single-digit organic growth.
2. Growth Forecasts Revised Lower
Analysts trimmed Chewy’s fiscal 2026 revenue estimate to $13.43 billion from $13.63 billion after excluding contributions from recent acquisitions such as Modern Animal and SmartPak. Underlying organic growth was forecast at 5.7%, down from 6.2% in fiscal 2025, with core growth falling to roughly 5.5% after accounting for the veterinary clinic business.
3. Earnings and Valuation Shifts
Despite first-quarter adjusted EBITDA exceeding expectations and steady active customer additions, softer discretionary spending trends prompted a cut in fiscal 2026 EPS estimates to $0.86 from $0.92. Profitability forecasts were lowered as analysts questioned the sustainability of current demand indicators.
4. Investor Implications
The downgrade highlights increased macroeconomic sensitivity and a need for more conservative valuation assumptions. Investors may reassess Chewy’s share performance if mid-single-digit revenue growth fails to support a premium multiple.
