Chewy Stock: Why Analysts Say Boring May Be the Best Buy

Key Points

• Due to its strong business model, Chewy stock is harnessing attention from Wall Street analysts as one of the best plays in the consumer sector.
• Wall Street analysts are raising their price targets on the stock as they recognize its strong positioning.
• A recent $500 million buyback from management confirms the stock may be cheap today.

Safety is boring—but boring can be the smartest play when markets are stretched thin. With the S&P 500 trading near record highs and the Federal Reserve cutting rates, investors should reconsider the assumption that this cycle will play out like the last. During COVID-19, rate cuts were purely stimulative, aimed at preventing deflation. Today, with inflation still hovering around 3%, the dynamics are very different.

That’s why stable, cash-generating businesses may become a preferred option for investors seeking shelter from volatility. Enter Chewy NYSE: CHWY. Its subscription-based model offers predictability, and its loyal customer base provides a foundation for consistent revenue. These are the kinds of traits that tend to shine in uncertain markets.

It’s also why some analysts have already moved to raise their price targets, aiming to get ahead of a potential upside move. If Chewy ends up outperforming both its sector and the broader market, they’ll be able to say they saw it coming.

Why Wall Street Likes Chewy Stock

Within the consumer staples sector, few names are as recession-resistant as Chewy. Whether the economy is booming or shrinking, or inflation is weighing on consumer wallets, pet spending tends to hold steady. Families consistently make room in their budgets for their pets, which gives Chewy a durable revenue base.

That reliability is part of the reason analysts and investors are growing more confident. The consensus price target for Chewy stock is now $45.84, implying about 16% upside from current levels. But some are even more bullish. Analyst Michael Morton from Moffett Nathanson recently issued a Buy rating with a $48 price target, suggesting a 21% upside and putting the stock within striking distance of its 52-week high.

Beyond sentiment, the numbers support the story. Chewy currently boasts a gross profit margin of 29.5% and a return on invested capital (ROIC) of 15.7%. ROIC is particularly important because it tends to correlate closely with long-term stock performance and is a key metric for evaluating how efficiently a company reinvests profits to create value.

Investors are clearly paying attention. Despite its high price-to-earnings (P/E) ratio of 113.3x—a steep premium compared to the retail sector average of 20.2x—buyers are still stepping in. That kind of premium reflects expectations of future growth, and a willingness to pay for a business with durable earnings potential. For more context, you can compare Chewy with its industry competitors.

Institutional Optimism Builds

It’s not just analysts or market multiples sending a signal—institutional capital is following suit. In August 2025, Invesco Ltd. increased its stake in Chewy by 34.7%, bringing its position to $306.3 million, or 1.7% ownership of the entire company.

While some might point to selling from BC Partners during the same period, that move is more reflective of portfolio rebalancing than waning conviction—especially after Chewy gained 18.4% year-to-date, outperforming the S&P 500 by nearly five percentage points.

This type of rebalancing is common when a large position grows oversized following a strong run. What’s more telling is what Chewy did next: the company repurchased the $500 million stake (roughly 3% of its market cap) directly from BC Partners.

Rather than simply walking away with cash, management reinvested in the business—an action that signals strong insider confidence in Chewy’s long-term value. It also supports the idea that the stock is still undervalued, reinforcing analysts' decision to raise their targets.