1. Mizuho's Upgrade and Price Target

Mizuho upgraded Chewy from Neutral to Outperform, raising its price target from $24 to $42 per share, reflecting confidence in Chewy's growth prospects for 2025. The firm identifies the company as a "Top Pick" within the Consumer Internet sector.

2. Key Drivers Behind Chewy's Upgraded Outlook

• EBITDA Margin Expansion:
  Mizuho projects high-single to double-digit growth in Chewy's EBITDA margins, driven by:

  • Improved cost management.
  • Operational efficiency initiatives.

• Mobile App Growth Opportunity:
  Chewy's under-penetrated mobile app is a focal point for growth, showing early success through:

  • Increased average order values (AOVs).
  • Enhanced auto-ship adoption.
  • Expansion of Chewy+ premium membership.

• Advertising Success:
  A strategic increase in Q4 ad spending, particularly in upper-funnel channels, has delivered:

  • Strong Black Friday and holiday performance.
  • Momentum expected to continue through mid-2025.

• Retail Media and Veterinary Clinics:

  • Retail Media Business: Growing steadily and contributing to diversified revenue streams.
  • Veterinary Clinics: Significant upside potential as Chewy unveils unit-level economics.

3. Mizuho's Broader Confidence in Chewy

The report underscores Chewy's ability to execute multiple growth strategies effectively. The company's focus on app penetration, advertising, and expansion into veterinary services is expected to yield robust revenue and EBITDA growth in 2025.

Sector Context and Comparable Valuations

For investors assessing Chewy within the broader consumer internet landscape:

• Explore market valuation trends and comparative metrics using the Ratios (TTM) API.
• For industry-specific analysis, consider the Industry P/E Ratio API to gauge Chewy's positioning.