Market News

Investors Cheer as Insider Bites into Chewy Stock; Street Sees 72% Upside

Story Highlights

A major insider just bought a chunk of Chewy stock. This development comes just on the heels of the company delivering a robust Q1. Wall Street, in the meantime, is seeing major gains in the price too!

Shares of online pet products retailer Chewy (CHWY) rose nearly 2.5% on Wednesday after a major insider bought a chunk of the company’s stock. The move comes on the heels of the company’s recent robust first-quarter showing that sent its shares flying by 24% last Thursday.

Yesterday, James Star, Director at Chewy, bought the company’s shares worth around $5 million. This informative Buy transaction indicates a positive insider confidence signal for the company.

The Director acquired 180,636 shares of the company at an average price of $27.70 per share. Furthermore, the TipRanks insiders tool indicates Star has so far had an 80% success rate in his transactions in Chewy stock, with an average 39.8% return per transaction.

Analyst’s Take

After falling over 60% over the past year, Chewy stock is gaining positive sentiment from Wall Street as well as hedge funds.

The Street has a Moderate Buy consensus rating on Chewy based on 10 Buys, seven Holds, and a Sell. The average Chewy price target of $49.94 implies a 72.27% potential upside for the stock.

RBC Capital’s Steven Shemesh expects sales to accelerate but has decreased the price target on the stock to $59 from $73 due to multiple compressions in the company’s peers. Still, the lowered price target implies a 103.5% potential upside for the stock.

Upbeat hedge Funds

In the last quarter, hedge funds have lapped up 43,300 Chewy shares, which indicates a very Positive hedge fund confidence signal. Importantly, Ray Dalio’s Bridgewater Associates has made a fresh entry into the stock worth $837,988.

Closing Note

Following the Q1 showing, Chewy shares are already gaining momentum. A confluence of positive hedge fund actions, major insider Buy, the expected 72% price upside, and sales acceleration all bode well for the stock.

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