Chewy slips as Jefferies downgrades stock on valuation concerns

Shares of online pet products retailer Chewy CHWY.N down 2.7% to $46 premarket

Brokerage Jefferies downgrades Chewy to "hold" from "buy" due to valuation concerns, with note titled "Valuation Gives Us Paws," citing stock is "primed for a beat and raise" but has limited upside

Says stock's price is a concern as it's trading at high valuation that's "8 turns higher than March" and above its normal range, making it hard to justify further price increases

Jefferies says current valuation already assumes beat-and-raise guidance in Q1, which brokerage thinks is "unlikely"

Pet market is "relatively stable", but spending is only up 3.5% in April, as economic uncertainty affects consumer behavior, limiting co's potential for big gains - brokerage

However, Jefferies ups CHWY's PT by $2 to $43, which is 9% downside to the stock's Wednesday close

As of last close, stock up 41.2% YTD