Chewy’s entry into the veterinary clinic market has sent its shares sharply higher, according to Morgan Stanley. Analyst Nathan Feather named Chewy a top pick, rating it overweight with a $50 price target, implying 15% appreciation from Tuesday’s close.
Feather raised his bull case outlook by $7 to $75 per share, citing “upside optionality” tied to the clinic business. In this scenario, Feather sees Chewy rising as much as 73%. The analyst believes clinics will be a structural accelerant for multi-year growth, with a high likelihood of success and potential for call option upside.
Chewy’s first veterinary clinic opened last year, targeting a $40 billion total addressable market. Feather estimates that every 100 clinics will add $50 million in earnings before interest, taxes, depreciation, and amortization (EBITDA), and $500 million to $800 million in enterprise value. The analyst also expects a return of 2.5 to 5 times on investment.
Feather predicts a “halo effect” from running vet clinics and said Chewy is likely to rely on mergers and acquisitions to build the clinic business. Chewy shares have surged 30% this year, extending last year’s 42% gain.
Source: https://www.cnbc.com/2025/06/25/morgan-stanley-says-chewys-expansion-could-drive-up-shares-70percent.html