Chewy (NYSE:CHWY) was lifted to Overweight from Equal Weight at Barclays on Thursday, with a new price target of $30 per share, up from $19.
Analysts said "the dog days are over" for the company, with the new price target suggesting a potential 40% upside. Barclays also believes CHWY's growth inflects in F2H24.
Furthermore, Barclays highlighted the name as one with the potential for outsized returns within the challenged e-commerce sub-sector in 2024, with its valuation looking attractive.
"We anticipate revenue growth will trough in F1H24 and reaccelerate in the back half as customer growth stabilizes and Canada begins to ramp," analysts mentioned. "We see upside to consensus over the next few years as high-margin advertising (recognized as a contra-COGS) builds both on and off-site, while areas such as vet clinics and insurance could drive further positive revisions longer term as those businesses scale," they added.
"Net net, with shares hovering around the 2019 IPO price, we see this as a good entry point, particularly as we see CHWY as largely insulated against competition from Temu," they concluded.