Goldman Sees Long-Run Upside, Raises Chewy (CHWY) Target to $52

Core Insights - Chewy, Inc. has been recognized as one of the best blue-chip stocks to buy under $50, indicating strong market confidence in its long-term potential [1] - Goldman Sachs raised its price target for Chewy from $44 to $52, citing stronger-than-expected Q3 results driven by active customer growth, improved gross margins, and disciplined spending [2] - The company is expected to continue its positive trajectory into Q4 and beyond, focusing on market share growth and margin expansion through various initiatives [2] Financial Performance - For Q3 2025, Chewy reported revenue of $3.12 billion, reflecting an 8.3% increase year-over-year [3] - The gross margin improved to 29.8%, which is a 50 basis points increase compared to the previous year [3] - SG&A expenses for the quarter were $588.6 million, accounting for 18.9% of sales, which included approximately $2.7 million in one-time costs related to the acquisition of SmartEquine [3] Strategic Developments - Chewy announced a definitive agreement to acquire SmartPak Equine, enhancing its presence in the equine health product market and moving into higher-margin health and wellness offerings [4] - The acquisition aims to leverage SmartEquine's premium products and loyal customer base alongside Chewy's logistics and customer support to create a comprehensive experience for equine customers [4] Business Overview - Chewy, Inc. is a leading online retailer in the US for pet products, offering a wide range of items including food, treats, supplies, and prescription medications for various animals [5]