What Happened?
Shares of e-commerce pet food and supplies retailer Chewy (NYSE: CHWY) jumped 3.9% in the afternoon session after the stock's positive momentum continued as MoffettNathanson upgraded the company to a "Buy" rating and set a price target of $48.
The upgrade was based on the expectation that Chewy would see more consistent customer additions as pet household formations recovered. This positive view was in line with broader sentiment, as the consensus rating from dozens of analysts was also a "Buy." The average price target among a group of 15 analysts stood at $46.73, signaling confidence in the company's future growth prospects.
After the initial pop the shares cooled down to $39.48, up 4% from previous close.
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What Is The Market Telling Us
Chewy’s shares are quite volatile and have had 17 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 10 days ago when the stock gained 2.8% on the news that investment firm Piper Sandler reiterated its "Overweight" rating and $48.00 price target on the company.
The move comes after the stock plunged last week following its earnings report, a sell-off that some now view as an overreaction. Piper Sandler's confidence is based on Chewy's second-quarter performance, where it surpassed expectations for new customer growth, sales, and gross margin. The firm highlighted Chewy's strategic investments in its new Chewy+ membership program and a proprietary fresh and frozen dog food line called Get Real, both aimed at accelerating market share gains.
Other potential growth drivers noted by the firm include the expansion of Chewy Vet Care practices and the company's recent entry into the Canadian market, reinforcing a positive outlook despite the initial negative market reaction to its earnings.
Chewy is up 16.5% since the beginning of the year, but at $39.48 per share, it is still trading 18.1% below its 52-week high of $48.21 from June 2025. Investors who bought $1,000 worth of Chewy’s shares 5 years ago would now be looking at an investment worth $700.29.
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