Chewy's stock faced downward pressure on December 5th following a downgrade from Exane BNP Paribas. The investment firm adjusted its rating on Chewy from "Outperform" to "Neutral," setting a price target of $30. This downgrade comes despite Chewy's recent financial results, which showed a 4.8% year-over-year increase in net sales to $2.88 billion for the third quarter of fiscal year 2024. The company's gross margin also improved by 80 basis points to 29.3%, and net income reached $3.9 million, marking a positive shift in profitability.
The downgrade by Exane BNP Paribas appears to have overshadowed Chewy's financial performance, contributing to a significant decline in its stock price. The market's reaction suggests that investors are cautious about the company's future prospects, aligning with the more conservative outlook provided by the investment firm.
Chewy's shares closed at $31.07, down 7.17% from the previous day's close of $33.47, with a slight after-market increase to $31.15.