Chewy (CHWY) stock was trading more than 26% higher in Monday's pre-market session after Keith Gill, the investor also known as Roaring Kitty, disclosed a noteworthy position in the online pet food and products retailer. However, the stock quickly came back down to earth and was last seen 6% lower.
In a filing with the Securities and Exchange Commission (SEC), Gill disclosed a 6.6% stake in Chewy worth just over $245 million based on Friday's closing price of $27.24. In total, Gill owns roughly 9 million shares of the consumer discretionary stock.
Roaring Kitty helped spark a massive short squeeze in GameStop (GME) stock back in 2021 and returned to the spotlight with a cryptic post on X in mid-May, igniting another round of meme stock mania.
Gill apparently now has his sights set on Chewy. The pet supplies company was founded by Ryan Cohen in 2011, and he was CEO of the CHWY until 2018. Cohen has since left Chewy and is now chairman and CEO of GameStop.
Is Chewy stock a buy, sell or hold?
After a slow start to the year, Chewy is now up over 60% in the past three months thanks in part to a solid fiscal first-quarter earnings report. And Wall Street is bullish on the stock. According to S&P Global Market Intelligence, the consensus recommendation among the 28 analysts following CHWY that it tracks is a Buy.
However, analysts' price targets have struggled to keep up with CHWY’s surging share price in recent months. Currently, the average price target of $26.08 is right around where the stock stands today.
Financial services firm Wedbush is one of the more bullish outfits on CHWY stock with a Buy rating at $28 price target.
"CHWY continues to gain market share and materially expand margins in a weak industry environment while the company indicated encouraging pet household formation trends with net adoptions turning positive for the first time since 2022," Wedbush analyst Seth Basham said in a May 30 note following Chewy's earnings release. "Additionally, benefits from cross-sales of pharmacy products continues to drive net spending per average customer (NSPAC) higher with further room for improvement and additional upside potential if industry demand normalizes."
Wedbush's $28 price target represents implied upside of roughly 10% to current levels.
