Morgan Stanley lowered its price target for pet e-commerce retailer Chewy (CHWY) to $36 from $37, while maintaining an "Overweight" rating. The firm stated that the 11% sell-off in Chewy's stock on September 9, following its fiscal Q2 2026 earnings report, was "overdone," but only partially so. While Chewy reported Q2 net sales of $3.33 billion, up 7.3% year-over-year, organic growth decelerated to 5.7%, approximately 120 basis points lower than Q1. Morgan Stanley noted that the EBITDA beat included about $15 million in non-recurring items. The firm believes a meaningful re-rating of the stock is unlikely until positive organic estimate revisions are seen, but highlighted the redesigned Chewy+ membership program as an idiosyncratic catalyst not dependent on macro improvement.