Jefferies downgraded Chewy stock to "hold" from "buy"
Chewy Inc (NYSE:CHWY) stock is down 2.8% in pre-market trading after Jefferies downgraded the pet e-commerce stock to “hold” from “buy,” despite raising its price target to $43 from $41. The brokerage pointed to valuation as its primary concern.
The stock is still up 113% over the last 12 months and 41.2% year-to-date, having just hit a June 3 more than two-year high of $47.55. While yesterday ended a four-day win streak, the 10-day moving average has been a reliable floor during recent pullbacks.
Analysts remain broadly bullish, with 20 of 28 covering firms maintaining a “buy” or better rating. If momentum fades, there’s room for sentiment to unwind. Still, short interest has fallen 17.2% in the last two weeks, and the 7.8% of float sold short could provide fuel for gains.
For those looking to capitalize, options are pricing in relatively low volatility. Chewy’s Schaeffer’s Volatility Index (SVI) of 65% sits in the 29th percentile of its annual range, suggesting affordable premiums.