Nomura Instinet analyst Mark Kelley upgraded Chewy (CHWY) to Buy from Neutral and raised his price target for the shares to $36 from $32. The stock closed Friday down $1.04 to $26.39.
Margin concerns following the company's Q2 results are overblown, Kelly tells investors in a research note titled "Time to Take a Bite." The analyst remains confident that Chewy's core business "continues to perform."
Further, Chewy's fulfillment center network is a "distinct barrier to entry for potential new entrants," says the analyst. He views the stock's valuation as more attractive now with limited downside risk.
Comments
Log in or sign up to join the conversation.