Chewy Stock Bitten by Bear Note Before Earnings

Wedbush lowered CHWY’s price target to $31 from $45

Chewy Inc (NYSE:CHWY) is headed into the earnings confessional with its tail between its legs. The pet goods e-tailer’s second-quarter report is slated for release for Wednesday, Aug. 30 after the closing bell, and CHWY earlier hit a one-year low of $25.29, after Wedbush lowered its price target to $31 from $45. Now firmly below its descending 20-day moving average after a rejection around $40, CHWY carries a 31.2% year-to-date deficit.  

CHWY 20 Day

Don’t expect things to suddenly improve for the equity, which has a less-than-stellar history of post-earnings reactions. Chewy stock finished five of its last eight next-day sessions lower, but it’s worth noting it did see a 21.6% pop in May. Shares averaged a move of 12.4% over the past two years, regardless of direction, but the options pits are pricing in a bigger-than-usual move of 18.4% this time.

At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Chewy stock’s 50-day call/put volume ratio of 1.81 ranks higher than 88% of readings from the past year. This is indicative of a stronger appetite than usual for calls. 

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