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Chewy Inc. (NYSE: CHWY) had a hot initial public offering this summer that made for the round of unicorn valuations debuting on the stock market. The online business of PetSmart priced at $22.00 per share, but the post-IPO range of $30.78 to $41.34 should show just how well this IPO went. It also proved to be a dream acquisition of PetSmart for more than $3 billion back in 2017 as PetSmart remains its top owner with approximately 80% of the super-majority voting Class B shares at the IPO.

Chewy’s quiet period for analysts inside the underwriting syndicate has ended and those analysts have initiated coverage. While there was a flurry of excitement out of the IPO gate, the pool of analysts as a whole just doesn’t add up to the biggest upside for post-IPO investors who were wondering whether they missed the Chewy boat.

It is important to consider that the current bull market is over 10 years old, and while the markets have seen some selling, the Dow Jones industrials and S&P 500 remain extremely close to all-time highs. Analysts typically assign 8% to 10% upside on their Buy and Outperform ratings for Dow or S&P 500 types of companies at this stage in the bull market.

While some analysts are more positive on Chewy than others, it seems that the bulk of the analysts covering it see the price as having risen too high to merit enough upside for new buyers. That means that more upgrades and stronger ratings may have to come after (also, if) a pullback in the shares is seen ahead.

24/7 Wall St. has taken a snapshot of many of the analyst calls. We have highlighted the positive calls, followed by the more cautious or neutral calls.

JPMorgan started Chewy with an Overweight rating and a $42 target price. Merrill Lynch and UBS each started Chewy with a Buy rating, along with price objectives of $40 and $42, respectively. And Wells Fargo initiated coverage with an Outperform rating and a $40 target price.

The following initiations were more cautious:

• Morgan Stanley as Equal Weight with a $33 price target
• RBC Capital Markets at Sector Perform with a $37 target
• Jefferies with a Hold rating and a $35 target price
• Barclays as Equal Weight with a $32 target price
• Nomura/Instinet at Neutral with a $36 price objective

Two firms issued ratings but without price target data:

• William Blair started Chewy as Outperform
• Raymond James started it at Market Perform

Wedbush Securities started Chewy with a Neutral rating on June 20, but the firm was not a part of the underwriting syndicate.

Shares of Chewy were down 3.8% at $33.23 Tuesday afternoon. The nearly 2 million shares that had traded hands could be considered lackluster trading volume, although the market cap is still above $13 billion.

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