Chewy (NYSE:CHWY) Sets New 52-Week Low - What's Next?

Key Points

• Chewy hit a new 52-week low during Wednesday trading, falling as low as $19.47 and closing well below its prior $21.63 level as heavy volume added to the pressure.
• Recent commentary around Chewy suggested caution on consumer spending, which could hurt near-term sales growth and has contributed to the stock’s weakness.
• Despite the selloff, Wall Street remains broadly constructive: analysts still rate Chewy a Moderate Buy overall, with an average target price of $42.77, even after the company’s latest earnings miss.

Chewy (NYSE:CHWY - Get Free Report) reached a new 52-week low during mid-day trading on Wednesday . The stock traded as low as $19.47 and last traded at $19.6150, with a volume of 19157032 shares trading hands. The stock had previously closed at $21.63.

Chewy News Roundup

Here are the key news stories impacting Chewy this week:

• Negative Sentiment: Chewy’s investor-conference comments reportedly reflected caution on consumer spending, which could weigh on near-term sales growth and customer demand. Chewy slides nearly 8% as cautious consumer tone pressures shares at investor conference
• Negative Sentiment: The stock hit a new 52-week low, which often triggers additional technical and momentum-driven selling from traders and systematic funds. Chewy Stock Is Hit New 52-Week Low On Tuesday - Here's Why
• Neutral Sentiment: Chewy presented at J.P. Morgan’s technology, media and communications conference, keeping the stock in focus, but the transcript itself does not provide a clear new catalyst. Chewy, Inc. (CHWY) Presents at J.P. Morgan 54th Annual Global Technology, Media and Communications Conference Transcript
• Neutral Sentiment: Chewy was also highlighted by analysts as a GARP-style stock and as a name with premium/value mix expansion potential, but these are longer-term supportive themes rather than immediate trading catalysts. Add These 4 GARP Stocks to Your Portfolio to Receive Handsome Returns

Analyst Ratings Changes

A number of equities research analysts have recently commented on the stock. Argus raised shares of Chewy to a "strong-buy" rating in a report on Tuesday, April 7th. Bank of America reduced their target price on shares of Chewy from $46.00 to $40.00 and set a "buy" rating for the company in a report on Thursday, March 26th. Barclays reduced their target price on shares of Chewy from $52.00 to $48.00 and set an "overweight" rating for the company in a report on Thursday, March 5th. Morgan Stanley reduced their target price on shares of Chewy from $50.00 to $49.00 and set an "overweight" rating for the company in a report on Tuesday, March 31st. Finally, TD Cowen upped their target price on shares of Chewy from $39.00 to $42.00 and gave the company a "buy" rating in a report on Thursday, March 26th. Two investment analysts have rated the stock with a Strong Buy rating, eighteen have issued a Buy rating and five have issued a Hold rating to the company's stock. According to data from MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and an average target price of $42.77.

Chewy Stock Down 9.3%

The stock has a market capitalization of $8.17 billion, a PE ratio of 37.72, a PEG ratio of 0.94 and a beta of 1.50. The firm's fifty day moving average is $25.15 and its 200-day moving average is $29.05.

Chewy (NYSE:CHWY - Get Free Report) last posted its quarterly earnings results on Wednesday, March 25th. The company reported $0.09 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.28 by ($0.19). The firm had revenue of $3.26 billion for the quarter, compared to analysts' expectations of $3.26 billion. Chewy had a return on equity of 53.48% and a net margin of 1.77%.The company's revenue for the quarter was up .5% on a year-over-year basis. During the same period in the prior year, the company earned $0.28 earnings per share. On average, analysts expect that Chewy will post 0.89 EPS for the current year.

Insider Activity

In related news, CEO Sumit Singh sold 83,306 shares of the stock in a transaction dated Monday, May 4th. The shares were sold at an average price of $25.60, for a total transaction of $2,132,633.60. Following the completion of the transaction, the chief executive officer directly owned 874,061 shares of the company's stock, valued at $22,375,961.60. This represents a 8.70% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, General Counsel Da-Wai Hu sold 8,149 shares of the stock in a transaction dated Wednesday, April 1st. The stock was sold at an average price of $26.91, for a total transaction of $219,289.59. The disclosure for this sale is available in the SEC filing. Insiders have sold 95,675 shares of company stock valued at $2,459,955 over the last three months. 0.43% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

A number of hedge funds have recently added to or reduced their stakes in CHWY. Royal Bank of Canada increased its holdings in Chewy by 2.5% in the first quarter. Royal Bank of Canada now owns 220,509 shares of the company's stock valued at $7,168,000 after buying an additional 5,466 shares in the last quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. purchased a new position in Chewy in the first quarter valued at about $510,000. NewEdge Advisors LLC increased its holdings in Chewy by 5,238.3% in the first quarter. NewEdge Advisors LLC now owns 32,510 shares of the company's stock valued at $1,057,000 after buying an additional 31,901 shares in the last quarter. Goldman Sachs Group Inc. increased its holdings in Chewy by 1.5% in the first quarter. Goldman Sachs Group Inc. now owns 1,176,138 shares of the company's stock valued at $38,236,000 after buying an additional 17,788 shares in the last quarter. Finally, UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC increased its holdings in Chewy by 31.6% in the first quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 383,966 shares of the company's stock valued at $12,483,000 after buying an additional 92,129 shares in the last quarter. 93.09% of the stock is owned by hedge funds and other institutional investors.

About Chewy

Chewy, Inc NYSE: CHWY is a leading e-commerce retailer specializing in pet food, supplies and services. The company offers a comprehensive assortment of products for dogs, cats, fish, birds and other small animals, including prescription medications, veterinary health products, grooming essentials and toys. Through its online platform and mobile app, Chewy provides an intuitive shopping experience with features such as Autoship, ensuring regular deliveries of pet essentials at schedule intervals.

Founded in 2011 by Ryan Cohen and Michael Day, Chewy initially operated under the name Mr.

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