5 Oversold Stocks Offering High Upside

3. Chewy Inc. (NYSE:CHWY)

Chewy Inc. (NYSE:CHWY) is one of the 10 oversold stocks offering high upside.

On June 12, Citi reaffirmed a Buy rating for Chewy Inc. (NYSE:CHWY) while reducing the price target from $37 to $31. Despite the downward adjustment, the estimated price target still results in an upside of almost 75%.

According to the firm, the recent post-earnings selloff in the shares is directly tied to negative earnings revisions, which have pushed the stock to trade at an all-time low valuation. Furthermore, Citi characterized the stock’s current valuation discount relative to Petco Health and Wellness Company Inc. (NASDAQ:WOOF) as difficult to understand. Ultimately, the firm maintains that Chewy presents an attractive investment opportunity at its current trading levels.

On June 11, RBC Capital reduced the price target on Chewy Inc. (NYSE:CHWY) from $47 to $34, which still leads to an upside potential of over 91%. The firm kept an Outperform rating on the stock following the first-quarter results.

The firm highlighted that relatively sluggish guidance seemed on the cards after the management’s mid-quarter commentary. With the updated forecast properly incorporating existing risks, the emergence of potential catalysts seems unlikely due to minimal growth expectations for the category.

Chewy Inc. (NYSE:CHWY) is an e-commerce retail business that focuses on pet-health products and services. It offers supplies, medications, treats, and food for pets through a popular “Autoship” service, which generates 70% of business revenues. It offers products from over 3,500 brands through a high-volume automated distribution network.