Chewy Stumbles Following Wedbush Downgrade
2022.07.26 22:54
Chewy (CHWY) Stumbles Following Wedbush Downgrade
By Michael Elkins
A Wedbush analyst downgraded Chewy Inc. (NYSE:CHWY) from Outperform to Neutral, sending the shares down over 8% near end of trading Tuesday. The analyst believes that, while CHWY’s current valuation is slightly less than a turn below its historical median, Wedbush sees more downside risk to shares after the latest run.
In a previous report, Wedbush highlighted a modest risk to consensus net customer additions. However, they believed that the risk was offset by potential for net spending per average customer. But the analyst says that this risk is growing and forecasts just 2% active customer growth for FY22 (vs. consensus’ +4%).
Wedbush increased CHWY’s price target to $44.00 (from $35.00) to reflect CHWY’s elevated valuation but sees limited upside from here.
Shares of Chewy Inc. closed at $41.75 yesterday.
