Chewy: Morgan Stanley Stays Bullish, Maintains Overweight Rating

Despite Near-Term Challenges, Long-Term Growth Story Remains Intact

In a recent research note, Morgan Stanley analyst Simeon Gutman reiterated his Overweight rating on Chewy, Inc. (CHWY), citing the company's strong long-term growth prospects despite near-term challenges.

Key Takeaways:

• Morgan Stanley maintains its bullish stance on Chewy, with an Overweight rating.
• While the company faces near-term headwinds, its long-term growth story remains intact.
• Chewy's focus on customer service, product assortment, and technology innovation will drive future success.

Gutman acknowledged that Chewy has been impacted by inflationary pressures and supply chain disruptions in recent quarters. However, he believes these challenges are temporary and that the company's underlying business remains strong.

The analyst highlighted Chewy's competitive advantages, including its loyal customer base, extensive product assortment, and advanced technology platform. He believes these factors will enable the company to navigate the current challenges and continue to grow in the years to come.

Gutman pointed to Chewy's recent initiatives, such as its partnership with DoorDash for same-day delivery, as evidence of its ongoing commitment to innovation. He also noted that the company's subscription service, Autoship, continues to gain traction, providing a recurring revenue stream.

Overall, Morgan Stanley remains confident in Chewy's long-term growth prospects. The analyst believes the company is well-positioned to capitalize on the growing demand for pet products and services, both online and offline.

Conclusion

Morgan Stanley's Overweight rating on Chewy reflects the analyst's belief that the company's near-term challenges are outweighed by its long-term growth potential. Chewy's strong competitive advantages, including its loyal customer base, extensive product assortment, and advanced technology platform, provide a solid foundation for future success.