Chewy Stock Plummets After Dismal Quarterly Report

No less than 10 analysts slashed their price targets

Deputy Editor
Mar 30, 2022 at 10:11 AM
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The shares of online pet supply retailer Chewy Inc (NYSE:CHWY) are down 16.2% at $42.78 this morning, after reporting worse-than-expected top- and bottom-line results for the fourth quarter. Specifically, the company reported losses of 15 cents per share on revenue of $2.39 billion, both of which missed Wall Street's estimates. Chewy chalked the misses up to rising labor costs and shrinking profit margins.

In turn, CHWY earned no less than 10 price-target cuts. The largest bear note came from Jefferies, which slashed its price objective all the way down to $60 from $90. Analysts were mostly optimistic toward Chewy stock coming into today. In fact, 11 of the 17 in coverage recommended a "buy" or better rating, and the remaining six a tepid "hold." The stock's 12-month consensus target of $61.43 is 40% premium current levels, leaving the security ripe for more price-target cuts.

The options pits are exploding with activity in response to the event. Already, 23,000 puts and 20,000 calls have crossed the tape, which is seven times what is typically seen at this point. Most popular is the weekly 4/1 40-strike put, followed closely by the 65-strike call in the same series. 

Chewy stock is now pacing for its fifth-straight monthly loss, and currently sports a 25% year-to-date deficit. The shares yesterday were rejected by the 100-day moving average, which has held its place overhead since a bear gap sent CHWY below the $81 level in early September. Year-over-year, the stock is down 44.9%. 

 

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