Chewy Drops After JPMorgan Downgrade; Petco and Freshpet Remain Stable
Chewy (NYSE:CHWY) fell nearly 6% on Friday after a second analyst downgrade in two days, with JPMorgan cutting its rating to Neutral from Overweight and lowering the price target to $24. The move follows an earlier cut by Evercore ISI, which also reduced Chewy's outlook due to macroeconomic pressures affecting organic growth despite strong execution. Analysts noted that while Chewy outperformed in customer acquisition and EBITDA margins during Q2, its results were partly driven by one-time gains like a $15 million tariff refund. In contrast, Petco (NASDAQ:WOOF) saw only minor declines of 0.6%, and Freshpet (NASDAQ:FRPT) rose slightly by 2%. The divergent performance suggests the selloff is specific to Chewy rather than an industry-wide issue in the pet sector. Broader market benchmarks like SPY were up, indicating that macroeconomic concerns are not deterring investors from risk assets overall. The downgrades highlight ongoing challenges for Chewy amid a tough economic environment and underscore investor skepticism about its long-term growth potential despite operational improvements.
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Topics: analyst_ratings pet_retail stock_movement