Investors Buy High Volume of Chewy Call Options (NYSE:CHWY)

Key Points

• Chewy saw unusually heavy call option buying on Tuesday, with investors purchasing 25,713 call contracts, about 36% above the stock’s typical daily volume. The activity suggests traders may be positioning for a short-term move higher.
• Despite the bullish options flow, Chewy shares were down slightly in midday trading, falling 0.1% to $20.13. The stock has also been pressured by weak recent performance, trading well below its 50-day and 200-day moving averages.
• Wall Street remains generally positive on Chewy, but analysts have trimmed price targets recently; the stock still carries a “Moderate Buy” consensus with an average target of $41.24. Recent earnings missed EPS estimates even though revenue was roughly in line with forecasts.

Chewy (NYSE:CHWY - Get Free Report) was the target of unusually large options trading on Tuesday. Stock investors acquired 25,713 call options on the stock. This is an increase of 36% compared to the typical daily volume of 18,917 call options.

Analyst Ratings Changes

Several equities research analysts have issued reports on the stock. JPMorgan Chase & Co. decreased their price objective on shares of Chewy from $40.00 to $35.00 and set an "overweight" rating for the company in a research note on Tuesday, June 2nd. Barclays cut their price objective on Chewy from $48.00 to $40.00 and set an "overweight" rating on the stock in a research report on Tuesday, May 26th. Guggenheim reissued a "buy" rating and issued a $45.00 price objective on shares of Chewy in a research report on Monday, April 27th. Mizuho cut their price objective on Chewy from $50.00 to $40.00 and set an "outperform" rating on the stock in a research report on Wednesday, June 3rd. Finally, Citigroup cut their price objective on Chewy from $40.00 to $37.00 and set a "buy" rating on the stock in a research report on Tuesday, May 12th. One investment analyst has rated the stock with a Strong Buy rating, eighteen have assigned a Buy rating and five have given a Hold rating to the stock. Based on data from MarketBeat, Chewy presently has an average rating of "Moderate Buy" and an average price target of $41.24.

Chewy Trading Down 0.1%

NYSE:CHWY traded down $0.02 during mid-day trading on Tuesday, hitting $20.13. The company had a trading volume of 3,892,919 shares, compared to its average volume of 8,264,133. The business has a fifty day simple moving average of $24.03 and a 200-day simple moving average of $27.81. Chewy has a 1 year low of $19.30 and a 1 year high of $46.35. The firm has a market capitalization of $8.39 billion, a price-to-earnings ratio of 38.73, a PEG ratio of 0.92 and a beta of 1.44.

Chewy (NYSE:CHWY - Get Free Report) last announced its earnings results on Wednesday, March 25th. The company reported $0.09 earnings per share for the quarter, missing the consensus estimate of $0.28 by ($0.19). The business had revenue of $3.26 billion for the quarter, compared to analyst estimates of $3.26 billion. Chewy had a net margin of 1.77% and a return on equity of 53.48%. The firm's revenue was up .5% on a year-over-year basis. During the same quarter in the prior year, the business earned $0.28 earnings per share. As a group, research analysts anticipate that Chewy will post 0.87 earnings per share for the current year.

Insider Buying and Selling at Chewy

In other Chewy news, CEO Sumit Singh sold 83,306 shares of the business's stock in a transaction that occurred on 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 sale, the chief executive officer directly owned 874,061 shares in the company, valued at $22,375,961.60. The trade was a 8.70% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. 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 business's stock in a transaction that occurred on Wednesday, April 1st. The stock was sold at an average price of $26.91, for a total transaction of $219,289.59. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold a total of 95,675 shares of company stock worth $2,459,955 over the last ninety days. Corporate insiders own 0.34% of the company's stock.

Institutional Trading of Chewy

Large investors have recently modified their holdings of the business. Winslow Asset Management Inc. acquired a new position in Chewy in the third quarter worth about $6,171,000. Vanguard Group Inc. grew its stake in Chewy by 5.4% in the fourth quarter. Vanguard Group Inc. now owns 19,920,347 shares of the company's stock worth $658,367,000 after purchasing an additional 1,017,214 shares in the last quarter. WINTON GROUP Ltd grew its stake in Chewy by 110.6% in the third quarter. WINTON GROUP Ltd now owns 239,800 shares of the company's stock worth $9,700,000 after purchasing an additional 125,943 shares in the last quarter. Intech Investment Management LLC grew its stake in Chewy by 218.6% in the third quarter. Intech Investment Management LLC now owns 173,300 shares of the company's stock worth $7,010,000 after purchasing an additional 118,903 shares in the last quarter. Finally, Champlain Investment Partners LLC bought a new stake in shares of Chewy in the 3rd quarter valued at approximately $89,022,000. 93.09% of the stock is currently owned by institutional investors and hedge funds.

Key Chewy News

Here are the key news stories impacting Chewy this week:

• Positive Sentiment: William Blair analyst Dylan Carden reiterated a Buy rating on Chewy, citing undervalued shares, margin upside, and long-term free cash flow potential. Article: Dylan Carden Reiterates Buy on Chewy, Citing Undervalued Shares, Structural Margin Upside, and Long-Term Free Cash Flow Potential
• Positive Sentiment: Unusually heavy call option buying suggests some traders are positioning for a post-earnings move higher in Chewy shares. Unusually large options trading activity on Chewy
• Neutral Sentiment: Chewy is set to report Q1 results before the bell, so investors are focused on revenue growth, margins, and guidance rather than the cookie-related search results that also mention “chewy.” Article: Earnings To Watch: Chewy (CHWY) Reports Q1 Results Tomorrow
• Neutral Sentiment: Investors are also watching Chewy’s AI spending and veterinary clinic expansion as possible longer-term growth drivers, though these initiatives could keep near-term costs elevated. Article: Is Chewy’s AI And Vet Clinic Push Quietly Rewriting Its Investment Story?
• Negative Sentiment: Chewy has recently been under pressure after its CEO sounded cautious about consumer demand, raising concerns that spending trends may remain soft. Article: Why Chewy Stock Got Mashed in May

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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