.August 23, 2024 12:52:00 PM

Chewy (NYSE:CHWY) shares rose 2% after Piper Sandler upgraded the stock to Overweight with a price target of $35. The firm highlights Chewy’s potential profitability despite slower top-line growth.

Improving gross margins, lower discounting levels, and operational efficiencies are driving Chewy’s profitability. Q2/24 showed disciplined promotional activity and enhanced operational performance.

Despite declining net ads, Chewy is seeing positive pet adoption trends for the first time since 2021. Piper Sandler’s survey indicates strong interest in pet ownership, supporting Chewy’s future growth.