Wall Street Is Betting Big On Chico’s FAS, Inc. (CHS). Are They Right?

On December 03, 2019, Chico’s FAS, Inc. (NYSE:CHS) shares lost -6.38% or -0.3 points to close at $4.4 with a heavy trading volume of 3.271 million shares. It opened the trading session at $4.6, the shares rose to $4.68 and dropped to $4.37, the range by which the price of stock traded the whole day. The company now has a market cap of $554 million and currently has 125.83 million outstanding shares. Chico’s FAS, Inc. (CHS) stock has accumulated 26.07 percent of market value in 21 trading days.

CHS stock’s trailing 3-year beta is 0.45, meaning there will be a lower rate of return, although posing a lower risk. The part of a firm’s profit given to each outstanding share of regular stock was -$0.21 share in the trailing 52 weeks. The stock’s value fallen -21.71 percent year to date (YTD) compared to a decline of -18.52 percent in 52 week’s period. The firm’s shares are still trading -31.89 percent below its 1-year high of $6.46 and 88.84 percent up from 52-week low of $2.33. The average consensus ranking on the company is 3, on a ranging where 5 is equal to a consensus sell rating. In other words, the mean analyst recommendations are ranking this stock as a hold.

Chico’s FAS, Inc. (CHS) is most likely going to rise -9.09 percent in the coming 12 months, as per price target approximations compiled by finviz. Nevertheless, they have set the price target at a $5.5-month high price target. This represents a whopping 25 percent increase from the current trading of shares. The 52-week median price target given by the analysts is $4.5, which means a return possibility of 2.27 percent in comparison with the closing price of the stock of $4.4 on December 03. The lowest price set for the stock is $2 — just above -54.55 percent from CHS share price now.

Past records have indicated that shares in Chico’s FAS, Inc. declined on 20 different earnings reaction days and we have yet to see whether this trend will play out and remain in place when the company reports upcoming earnings. Investors will get the next hint of CHS’s Q4 earnings on February 25. Analysts are predicting revenue to suffer decline of -2.8 percent to $510M in the financial fourth quarter, while EPS will soar by about 100 percent to -$0.14 per share. In the last quarter, it earnings of $0.05 per share came better than the -$0.09627, adjusted, expected by Thomson Reuters consensus estimate. Revenue for the quarter was $524.73M, topping the $514.28M analysts had expected. Earnings are seen to rise by -65.6 percent this year, 42.9 percent in the coming year and the trend continues by 10 percent every year in the next 5 years.

Let’s take a glimpse at some insider activity at Chico’s FAS, Inc. (NYSE:CHS) and observe the pattern. The earliest insider trade happened on 06/14/2019. Brooks Bonnie R. gathered a total of 28.7 thousand shares of the firm at average share price of $3.49. The total amount for the purchase was set at $100.16 thousand. On completing this exchange, the Interim President and CEO account balance was 276.26 thousand shares. The stock grew 26.07 percent from that insider purchase. On 06/13/2019, Baker Gregory S, SVP & General Counsel, did a purchase of 2 thousand shares at a price of $3.57 per share. This increased 7.14 thousand shares to the insider’s fortune and the stock experienced a 23.25 percent rally in price since the news became public. This exchange saw 44.66 thousand shares get into the SVP & General Counsel account.

On 06/13/2019, Director TOFALLI KIMBERLY ROY recorded a purchase transaction valued at $50.68 thousand. The purchase at $3.62 a share has added 14 thousand shares into the insider’s portfolio position. Meanwhile, shares price witnessed 21.55 percent increase since the transaction reporting date. The company insider is left with 21.24 thousand shares remaining in the account. Baker Gregory S, who works as SVP & General Counsel at the company, performed a purchase of 2 thousand shares in a transaction worth $9.9 thousand. The acquisition recorded on 11/29/2018 was priced at $4.95 per share. The stock price plunged -11.11 percent since the transaction. Baker Gregory S currently holds a stake of 24.51 thousand in CHS stock which is worth $107.84 thousand after the insider buying.

The stock is lingering around the initial support level of $4.29. After this, the following support is at the zone of $4.17. Up until the time the CHS stock hit levels beyond the current one, bulls should have no alarm. In terms of its momentum, the stock’s RSI hit 57.81 on the daily chart, and this may be a cause for concern. In case the price goes below $4.17 level on closing basis, there may be more profit booking with the stock growing weaker. Still, getting to the $4.6 level may cause a pull-back move approaching $4.79 mark.

The industry CHS deals with has an average P/E of 25.2. Its P/B ratio is standing at 1X compared to the 7.5 industry average. It is additionally sporting a 0.3 on the Price-to-Sales ratio, compared to the industry’s P/S average of 1.3. Chico’s FAS, Inc. has a 33.9% gross profit margin, with its operating margin around -1.4%. Alongside this, the company’s net profit margin currently stands at -1.2%.