Oppenheimer analysts started coverage on Chewy, Inc. (NYSE:CHWY) with an Outperform rating and a price target of $42. Shares fell around 70% from their all-time highs (Feb 2021), significantly underperforming S&P 500’s 4% decline.

The analysts believe the recent share pullback represents an attractive entry point for longer-term investors and the company’s attractive value proposition and expansion into new areas over time (healthcare and services) should result in share gains and further pet spend consolidation.

Furthermore, the analysts view the company’s strong balance sheet and its already being profitable in the first half of this year, even with significant ongoing investments, as a positive in the current investing and macro backdrop.