Chewy (CHWY) can return to a "beat & raise" story in 2026 with Q4 set to be a floor for performance, Morgan Stanley said in a preview report Tuesday. The Q4 results are due March 25.

"4Q will serve as a set-up print for the year, establishing a floor for performance," the report said.

Chewy is expected to issue initial fiscal-year 2026 guidance featuring revenue growth of between 7% and 7.5% and 90 to 100 basis points of EBITDA margin expansion, the note said.

"We think it can outperform those through the year, returning to a beat & raise cadence," the report said.

The note also pointed to the upcoming April vet disclosures, with Chewy's Vet Clinics set to become a bigger story piece in 2026.

Morgan Stanley kept its overweight rating while trimming its price target to $50 from $51, saying that the stock is offering a "compelling" entry point following its recent decline.

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