Wedbush upgrades Chewy stock, citing steady demand in 2023

Yahoo Finance Live anchors discuss a Wedbush analyst’s Outperform rating on Chewy stock.

Video transcript

BRIAN SOZZI: All right, Wedbush is throwing Chewy a bone, upgrading the stock from neutral to outperform, citing steady demand for the company in the resilient pet sector. Chewy had a comeback quarter a couple of months ago. So I'm not surprised to see this upgrade. Usually, the pet category does pretty well in a recession. Why? Because you're not going to starve your pet.

JULIE HYMAN: Yeah, the analyst is looking for faster growth here in 2023. I mean, we've been looking at the various pet product retailers, and there is more discretionary stuff for your pets, just like they're-- I mean, like, food is going to do fine. But maybe you buy fewer toys, not as many of those--

BRIAN SOZZI: As, look at that, sweater for puppy.

JULIE HYMAN: --sweet little blankets that are going on in the puppies.

BRIAN SOZZI: Aw, that's so cute.

JULIE HYMAN: But maybe-- I don't know-- maybe that's--

BRAD SMITH: A mouse?

BRIAN SOZZI: Aw.

BRAD SMITH: People are still buying mice out there?

JULIE HYMAN: Sure.

BRIAN SOZZI: They're pets, Brad. They're animals. They deserve love. They deserve hugs.

JULIE HYMAN: My cousin still has pet rats.

BRAD SMITH: Depending upon what kind of snake you own, that might be--

BRIAN SOZZI: I mean, the cat's depending on a little mice.

JULIE HYMAN: Oh.

BRAD SMITH: All right, yeah. Yeah, within this, though, you talk about consumables-- [LAUGHS]

JULIE HYMAN: Aw.

BRAD SMITH: Well, it's tricky. They said that Chewy operates in the resilient pet sector that should continue to benefit from steady demand for consumables in 2022.

BRIAN SOZZI: Some pet agency is coming after you on Twitter, bruh.