Chewy
Chewy Inc. (NYSE: CHWY) is a pure-play e-commerce provider of pet supplies and a subsidiary of privately held PetSmart. Over the past 12 months, the stock has dropped by more than 31%. That is almost half the amount the stock was down at the end of the previous quarter. The stock has added more than 35% since the beginning of the fourth calendar quarter, compared to an increase of around 8% in the consumer cyclical sector in which it is categorized. Chewy is set to report quarterly results after markets close on Thursday.
Analysts remain moderately bullish on the stock. Of 25 brokerages covering the company, 15 have a Buy or Strong Buy rating, while nine more have a Hold rating. At a recent share price of around $41.70, the upside potential to a median price target of $43.50 is 4.3%. At the high price target of $57.00, the upside potential is 36.7%.
Revenue in the third quarter of fiscal 2023 is forecast to come in at $2.46 billion, which would be up about 1.1% sequentially and by 11.3% year over year. Analysts expect an adjusted loss per share of $0.06, compared to the prior quarter’s EPS of $0.05 and the year-ago loss of $0.07 per share. For the full fiscal year, analysts forecast a per-share loss of $0.06, compared to last year’s loss per share of $0.17, on sales of $9.95 billion, up 11.9%.
Chewy stock trades at 70.4 times estimated 2025 EPS of $0.59. The company’s enterprise value to sale multiple for 2023 is 1.8. For 2024, the multiple is 1.6, based on estimated sales of $11.1 billion. The stock’s 52-week trading range is $22.22 to $62.54. Chewy does not pay a dividend. Total shareholder return for the past year is negative 31.4%.
Costco
Shares of Costco Wholesale Corp. (NASDAQ: COST) have slipped by more than 11% over the past 12 months, including a drop of more than 31% between early April and mid-May. Since that 52-week low in May, shares have added about 16%. Costco will release its earnings report on Thursday.
Monthly sales growth has risen by 6% to 10% over the past three months, and some analysts expect Costco to follow the lead of Sam’s Club and raise membership fees. Costco customers are loyal, and with prices rising on everything else, a 10% increase in the membership cost is unlikely to cause customers to flee.
Analysts are positive on the stock, with 20 of 34 having a Buy or Strong Buy rating. The other 11 rate the shares at Hold. At a price of around $481.20 a share, the upside based on a median price target of $565.00 is 17.4%. At the high price target of $650.00, the upside potential is 35.1%.
Revenue for the first quarter of fiscal 2023 is forecast at $54.68 billion, down 24.2% sequentially but up 8.6% year over year. Adjusted EPS are forecast at $3.16, down 24.8% sequentially and 6.4% higher year over year. For the full fiscal year ending in August, current estimates call for EPS of $14.63, up 10.2%, on sales of $244.89 billion, up 7.9%.
Costco stock trades at 32.9 times expected 2023 EPS, 29.5 times estimated 2024 earnings of $16.33 and 25.5 times estimated 2025 earnings of $18.89 per share. The stock’s 52-week range is $406.51 to $612.27. The company pays an annual dividend of $3.60 (yield of 0.73%). Total shareholder return for the past year was negative 10.6%.
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