Best Smidcap Ideas: Chewy Shares Look Attractive at Current Levels

研报英文原文证据摘录

Best Smidcap Ideas: Chewy Shares Look Attractive at Current Levels

TD Cowen eCommerce Platforms

Global Research

Chewy

TD SECURITIES (USA) LLC BEST SMIDCAP IDEAS 2026

Price: $17.51 (06/22/2026) Best Smidcap Ideas: Chewy Shares Look

Price Target: $34.00 Attractive at Current Levels

BUY (1)

ESG SCORE: 61/100

William Kerr THE TD COWEN INSIGHT

646 562 1349

CHWY is our Best Smidcap Idea for '26. The company seems well positioned with a number

bill.kerr@tdsecurities.com

of promising growth and margin levers that it is implementing, including i) CVC and Modern

John Blackledge Animal, ii) Advertising, iii) Automation, iv) Chewy+, and v) gen AI. We view shares as attractive

646 562 1359 at current levels trading at 6.3x EV/EBITDA despite a +15% EBITDA CAGR over the next 5 years.

john.blackledge@tdsecurities.com

Reiterate Buy and $34 PT.

Logan Whalley, CFA

646 562 1392 Summary Of Our Thesis

logan.whalley@tdsecurities.com

We believe that Chewy remains well positioned within the pet retail market, and that as online

James Kopelman penetration continues to rise it should take share from offline competitors such as local pet

646 562 1320

stores, traditional retailers and grocers. Meanwhile, we expect CHWY to continue getting more

james.kopelman@tdsecurities.com

efficient and to lean into higher margin verticals such as health, vet clinics, advertising, etc.

Key Data We expect these efforts to result in EBITDA margins expanding from 5.7% in FY25 to 10.2% in

Symbol NYSE: CHWY FY31.

Beta: 1.44

What Is Underappreciated Or Misunderstood?

52-Week Range: $43.43-$17.51

Market Cap: $4.1B Chewy does not need to take significant share within the pet category in order to meet or

Net Debt (MM): $3.3 exceed street expectations over the next few years. We estimate that Chewy will expand