What Happened?
Shares of e-commerce pet food and supplies retailer Chewy (NYSE: CHWY) jumped 5.9% in the afternoon session after Piper Sandler reiterated its "Overweight" rating and $48.00 price target on the company.
The investment firm's confidence follows the pet retailer's second-quarter 2025 performance, where it surpassed expectations for new customer growth, sales, and gross margin. Piper Sandler highlighted that Chewy is making 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. The firm also pointed to several other growth drivers, including the stabilization of the pet industry, the expansion of Chewy Vet Care practices, its recent entry into the Canadian market, and potential for future pricing adjustments.
The shares closed the day at $36.95, up 6.6% from previous close.
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What Is The Market Telling Us
Chewy’s shares are quite volatile and have had 16 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 5 days ago when the stock dropped 15.8% on the news that its second-quarter financial results failed to impress investors, despite largely meeting Wall Street's forecasts. Chewy reported adjusted earnings of $0.33 per share, which was in line with analyst estimates, and net sales of $3.10 billion, representing a slight beat on expectations and an 8.6% increase year-over-year.
The sharp negative reaction in the stock price suggests that the solid, but not spectacular, results were insufficient to meet higher investor expectations. With key metrics only meeting, rather than substantially beating, forecasts, it appears the market was looking for a stronger performance to push the stock higher.
Chewy is up 8.7% since the beginning of the year, but at $36.81 per share, it is still trading 23.6% 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 $680.28.
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