Evercore ISI downgraded Chewy, citing slowing organic growth and limited catalysts.

  • Evercore ISI downgraded Chewy to In Line from Outperform and kept its $25 price target. 
  • Analyst Mark Mahaney cited slowing organic growth and said the stock needs a clear growth catalyst to outperform.
  • On Stocktwits, retail sentiment improved to ‘extremely bullish’ territory. 

Chewy Inc. (CHWY) stock is heading toward its worst weekly performance since February as investors digest a cautious analyst downgrade. Evercore ISI cut the pet retailer’s rating despite a raised outlook, citing slowing 5.7% organic growth and limited near-term catalysts for meaningful upside. 

Chewy stock edged nearly 1% lower in Thursday’s premarket and has slumped over 12% so far this week. 

Evercore Says Chewy’s Growth Losing Momentum

Evercore ISI analyst Mark Mahaney downgraded Chewy to ‘In Line’ from ‘Outperform’ and maintained a $25 price target, implying a 20% upside to the stock’s last closing price. The change followed the company's fiscal second-quarter (Q2) results, which the firm characterized as a “very modest beat & raise.”

Mahaney pointed to a slowdown in Chewy's organic expansion, which has reached 5.7%. He expects the weaker growth trend to persist in both the immediate and intermediate periods, limiting the potential for a stronger stock performance.

The analyst sees "little reason for the stock to outperform the market from here" unless the company shows a clear new growth driver or meaningful business improvement. 

Chewy’s Q2 Performance And Outlook 

Chewy’s Q2 sales increased 7.3% to $3.33 billion, meeting Wall Street’s consensus estimate as per Fiscal.ai data, while adjusted EBITDA rose 23.7% to $226.7 million. The company raised its FY26 sales outlook to $13.46 billion-$13.57 billion and tightened its EBITDA margin forecast. The company’s gross margin held steady at 30.4%, while adjusted EPS came in at $0.36.

“We are not assuming a meaningful consumer recovery for the balance of this fiscal year. Instead, our confidence remains grounded in what we can control, gaining share, growing and retaining customers, scaling health and driving structural efficiencies across the business,” said CEO Sumit Singh in the earnings call. 

CHWY Stock: Retail View 

On Stocktwits, retail sentiment around the stock improved to ‘extremely bullish’ from ‘bullish’ territory the previous day. The stock saw a whopping 6,100% surge in message volume over the past week with a 0.4% gain in watchers. 

A user said, “The reality is that consumer behavior has shifted heavily toward online shopping. People can buy products 24/7 from virtually anywhere, and e-commerce is a major part of how business is done today. It’s 2026, not 1950. Online shopping is not some niche concept—it’s a fundamental part of modern retail. I’m assuming all the bears here are  70 and up.”

CHWY stock has cratered over 37% year-to-date. 

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