Chewy, Inc. (NYSE:CHWY) was downgraded to neutral from outperform by Wedbush analysts, who also lowered their price target on the company’s shares to $70 from $90. Shares closed around 5% lower on Monday.

According to the analysts, the company is well-positioned to capture market share given a long-term secular channel shift in the pet retail industry, however, now they expect at best in-line results for H2 and growth below consensus in 2022.

Net active customer growth has disappointed in H1 and the analysts anticipate further disappointment in H2 driven not only by the churn of last year’s surge in new customers but also by weaker gross customer additions.