JPMorgan Just Downgraded Chewy Stock. Here's Why.

Investors are bailing on Chewy (CHWY) shares on Sept. 11 after a senior JPMorgan analyst downgraded the online pet food and supplies retailer to “Neutral.” In his research note, Doug Anmuth reduced his price objective on CHWY to $24, although that still represents about a 20% upside from current levels. 

Chewy stock has been out of favor with investors in 2026. It is currently down nearly 40% versus the start of this year. 

Why JPMorgan Downgraded Chewy Stock

According to the analyst, macroeconomic pressure is increasingly hurting CHWY’s organic growth trajectory. 

Consumers continue to pull back on discretionary and premium pet categories like treats, toys, and high-end accessories, which warrants caution in playing the stock at current levels, he warned.

Anmuth’s note arrives shortly after Chewy reported its fiscal Q2 earnings, featuring a 7.3% year-over-year increase in revenue to $3.33 billion.

Much of that strength, however, was attributed to acquisitions like SmartPak and Modern Animal. On an organic basis, excluding those contributions, CHWY’s sales came in up a much more modest 5.7%. 

JPMorgan notes that until broader consumer sentiment stabilizes, top-line growth in non-essential pet care items will remain constrained, creating a challenging near-term backdrop for Chewy shares.

Macro Backdrop Warrants Lower Multiple

While Anmuth acknowledged CHWY’s strong fundamentals, including market share gains and sequential active customer growth of 208,000, he believes the current macro environment warrants a lower valuation multiple. 

In fact, the JPMorgan analyst even raised his 2026 adjusted EPS forecast for Chewy to at least $1.55, praising its AI-driven margin expansion and capital return profile.

However, Anmuth revised the valuation model to about 7x his 2028 adjusted EBITDA estimate of $1.2 billion, reflecting a more realistic market environment. 

Note that CHWY stock does not currently pay a dividend either. 

What’s the Consensus Rating on Chewy?

Other Wall Street analysts, however, remain bullish as ever on CHWY shares for the remainder of 2026. 

According to Barchart, the consensus rating on Chewy sits at “Moderate Buy” currently, with the mean price target of nearly $30 indicating potential upside of more than 45% from here. 

On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.