Raymond James upgraded Chewy to Outperform from Market Perform, citing an attractive entry point after the stock fell 33% since its fiscal third quarter results. The brokerage noted Chewy now trades at about 8x enterprise value to 2027 EBITDA, well below its three-year average of 22x. Raymond James set a $28 price target based on roughly 10x EV to EBITDA on fiscal 2027 estimates.

The firm expects fiscal 2026 revenue to rise about 7% year over year with EBITDA margins expanding 80 basis points to 6.5%. While concerns about conservative guidance have weighed on shares, Raymond James sees several growth drivers including steady consumer backdrop, organic active customer growth, and digital migration share gains. The brokerage highlighted that newer customer cohorts tend to increase spending over time.

Raymond James emphasized Chewy's defensive profile, noting autoship accounts for about 83% of revenue while staples categories such as consumables and healthcare make up roughly 90% of annual sales. The firm also pointed to pricing flexibility, suggesting if industry prices rise 1% to 2% in fiscal 2026, Chewy could either raise prices or lean into value to gain share. Margins should benefit from higher gross margin and moderating elevated investment spending.