Chewy's stock price leaped 9.68% to $32.02 a share after RBC analyst Mark Mahaney boosted his rating on the virtual pet store to outperform from neutral.
The RBC analyst kept his price target of $38 a share on Chewy, which went public last summer.
In his research note, RBC's Mahaney said he sees favorable near-term buying opportunities, with 2020 shaping up to be a potential breakthrough year as Chewy pushes toward profitability.
Mahaney also cited Chewy's solid fundamentals and the huge opportunity it is tapping into in the online pet products sales market.
Orders through Chewy's autoship option, which enables customers to set up reoccurring deliveries of everything from their dog's favorite pet food to medicines, have shot up 70%, the RBC analyst noted. Overall, the online pet product retailer is seeing 30% growth in active customers.
RBC's price target, at $38 a share, is bit higher than the $36-a-share-average of analysts who cover Chewy, according to Bloomberg. There are current 10 buy ratings on Chewy, three holds and no sell recommendations.
RBC's vote of confidence in Chewy comes roughly three weeks after a big upgrade of the stock by Wedbush analyst Seth Basham.
The Wedbush analyst boosted his price target on Chewy to $35 a share, up from $30, arguing Chewy is well-positioned to take advantage of explosive growth in the online pet products sector.