Chewy Faces Near-Term Pressure as Pet-Care Demand Softens, Morgan Stanley Says

MT Newswires Live05-26

Chewy (CHWY) faces near-term pressure from a weakening pet-care market and softer alternative data trends that may weigh on revenue growth, Morgan Stanley said Tuesday in a report.

Rising fuel costs and lower operating leverage also may weigh on margins, though full-year profitability guidance might remain broadly unchanged, the report said.

Chewy's fiscal 2026 organic revenue growth guidance of 7.3% to 8.5% may come under pressure, with alternative data pointing to growth closer to the mid-7% range, below initial expectations, Morgan Stanley said. Q1 results are due June 10.

The stock's sharp drop already reflects many of the company's challenges, and investor expectations now look too pessimistic given the company's long-term prospects, the report said.

Morgan Stanley lowered its price target on Chewy stock to $43 from $49 and maintained its overweight rating.

Price: 21.26, Change: +0.52, Percent Change: +2.53

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