Why Chewy Stock rose 13% last month

What happened

Actions of soft (NYSE: CHWY) climbed last month as the company received positive attention from analysts. He may also have grown in sympathy with GameStop a big part of the GameStop buying thesis was that Chewy’s co-founder Ryan Cohen was backing the action.

Based on data from S&P Global Market Intelligence, shares of the online pet seller ended January up 13%. The chart below shows that the stock climbed in the first half of the month before returning those gains.

CHWY given by YCharts

So what

There was little news on Chewy in the first week of January, but the headline jumped in the second week of the month on several articles. Cohen was named to GameStop’s board and installed two more directors, focusing more on his success with Chewy. That same week, Adobe Analytics reported that e-commerce sales surged over the holiday season, rising 32% to $ 188.2 billion, the equivalent of two years of growth. This increase is likely to favor Chewy, especially since pet products can be popular giveaways. Additionally, Credit Suisse raised its share price target from $ 104 to $ 121 and maintained an outperformance on Chewy. Analyst Erin Wilson Wright said she is increasingly confident in the company’s long-term growth trajectory and its ability to increase margins.

Image source: Chewy.

The following week the stock was lowered for sale by UBS and on the same day Needham raised its price target on Chewy from $ 100 to $ 110. Finally, on January 28, Wells Fargo raised its price target from $ 100 to $ 120, noting strong e-commerce momentum through 2021.

Now what

Chewy has been a big winner over the past year with shares rising 300%, benefiting from a number of trends including the growth of e-commerce during the pandemic and the increase in adoptions and spending on pets, as pets have been popular among people staying at home.

While the company’s performance has been strong, investor expectations are also high, and with a market capitalization already close to $ 50 billion, the growth stocks should calm down this year.