Chewy's Vet Care and Pharmacy Services Drive Growth Potential and Buy Rating

Bank of America Securities analyst Curtis Nagle maintains a Buy rating for Chewy (CHWY) based on its growth potential in vet care and pharmacy. The pet health sector is valued at $40 billion and Chewy is strategically positioned to benefit from it, with expanding veterinary services and leading pharmacy market share. Nagle expects Chewy to capitalize on pet adoption trends and demographic shifts, driving demand for its services. Citizens JMP also maintains a Buy rating with a $48.00 price target.

Bank of America Securities analyst Curtis Nagle has maintained a Buy rating for Chewy Inc. (NYSE: CHWY) based on its significant growth potential in veterinary care and pharmaceuticals. The pet health sector, valued at $40 billion according to the American Pet Products Association (APPA), represents a substantial opportunity for the company [1]. Nagle expects Chewy to capitalize on increasing pet adoption trends and demographic shifts, which are driving demand for its services.

Chewy's core business, which includes pet food and supplies, already serves 18 million active customers, many of whom are open to using Chewy-run veterinary clinics. The company's existing infrastructure, including data-rich customer insights, supply chain expertise, and tech-driven logistics, positions it well to leverage these opportunities [2]. Each clinic is projected to generate $2.4 million in annual revenue and $500,000 in EBITDA at maturity, with capital investments of $1.5–$2 million per clinic. This translates to a 2.5x–5x return on investment, making clinics a high-margin, scalable asset [2].

Additionally, Citizens JMP also maintains a Buy rating with a $48.00 price target, citing Chewy's strong core business and revenue visibility from its autoship program, as well as potential growth in advertising and health segments [3]. These ratings reflect the mixed analyst sentiment and strategic financial maneuvers surrounding Chewy, including a $1 billion public offering of its Class A common stock by its largest shareholder, BC Partners, with Chewy set to repurchase $100 million worth of shares [1].

In summary, Chewy Inc. is well-positioned to benefit from the growing pet health market, with a strong focus on veterinary care and pharmaceuticals. The company's strategic expansion into veterinary clinics and its leading market share in the pharmacy segment make it an attractive investment opportunity for those seeking exposure to the pet care boom.

References:
[1] https://ca.investing.com/news/analyst-ratings/chewy-stock-price-target-maintained-at-49-by-bofa-on-vet-care-potential-93CH-4101739
[2] https://www.ainvest.com/news/chewy-veterinary-clinics-strategic-play-dominance-40b-market-2507/
[3] https://www.ainvest.com/news/chewy-s-veterinary-clinics-a-strategic-play-for-dominance-in-a-40b-market-25071010b50c38a79e40bdac/