Chewy (NYSE:CHWY) shares rose sharply on Friday after Wedbush shifted to a Buy-equivalent rating from Neutral, forecasting margin expansion and significant user adds in 2023.
The firm’s analysis suggested that online search interest in the pet category has bottomed and the post-pandemic slump for e-commerce companies is near an inflection point. The research forecasts lessened customer churn into 2023, aiding the e-commerce company’s ability to notch over 1M active customer additions in the upcoming year.
“We also expect a solid 4Q22, with more upside than downside risk to sales and particularly margins,” Wedbush’s analysis added.
Wedbush upgraded the stock to Outperform from Neutral and hiked their price target to $55 from $35. Shares of the pet-focused e-commerce company rose 4.12% in premarket trading.
Read more on the company’s plans in pet telehealth.