Shares of pet food retailer Chewy Inc. shares got a buy rating from Guggenheim analysts who initiated coverage of the stock.
Guggenheim analysts set a $95 price target on the shares. The analysts cited a fast-growing market, a leading industry position, significant new and existing customer opportunities and other tailwinds for Chewy.
"As of today, although CHWY only participates in ~70% of the combined pet products and services market, the recent launch of telehealth tele-triage service (connect with a vet) in October 2020 and compounding medication (customized medicines) in November 2020 showcases management’s commitment to driving increased participation in the services-related needs of pet parents," analyst Steven Forbes wrote. According to Forbes, Chewy customers have shown "an extreme level of customer loyalty".
Chewy’s active customer base has grown to 19.2 million in 2020 from 1.5 million in 2015, implying 66% compound annual growth.