Canada Goose (GOOS:NYE) Baird Downgrades on Valuation

Analyst Coverage Change

Robert W. Baird analyst, Jonathan Komp downgraded Canada Goose Holdings to Neutral from Outperform.  The previous target forecast on the stock by Komp was $25 per share, which was not updated.  Komp believes the stock has run up on better than expected earnings, China re-opening and other positive factors.

Canada Goose Stock Forecast & Analysis

According to the average forecast of 8 analysts, the target price for the Canada Goose’s stock over the next 12 months is expected to be USD 29.10. The average analyst rating for the stock is “Hold,” which suggests that analysts are neutral on the stock and do not see it as a strong buy or sell. In addition, Stock Target Advisor’s own analysis of the stock is “Bearish,” which means that their analysis indicates that the stock may underperform in the future, based on the 4 positive signals and 11 negative signals they have identified. The last closing price of the stock was USD 21.83, and the stock’s price has seen a decrease of -1.71% over the past week, an increase of +26.18% over the past month, and a decrease of -27.35% over the past year.

Fundamental Analysis (FA)

Positive

  • Positive cash flow: The company has reported positive total cash flow in the most recent four quarters.
  • Positive free cash flow: The company has reported positive total free cash flow in the most recent four quarters.
  • Superior Earnings Growth: The stock has shown top quartile earnings growth in the previous 5 years compared to its sector.
  • Superior Revenue Growth: The stock has shown top quartile revenue growth in the previous 5 years compared to its sector.

Negative

  • Poor risk-adjusted returns: The company is delivering below median risk-adjusted returns compared to its peers. This suggests that returns from the company may be unpredictable.
  • Low market capitalization: The company has a market capitalization that is below the median for its sector, which may make it less stable in the long run unless it has a unique technology or market that can help it grow or get acquired in the future.
  • Below median dividend returns: The company’s average income yield over the past five years has been low compared to its peers. This may be a concern for investors looking for income from their investments.
  • Overpriced compared to earnings: The stock is trading high compared to its peers on a price to earning basis and is above the sector median.
  • Overpriced compared to book value: The stock is trading high compared to its peers median on a price to book value basis.
  • Overpriced on cashflow basis: The stock is trading high compared to its peers on a price to cash flow basis. It is priced above the median for its sectors.
  • Poor return on equity: The company management has delivered below median return on equity in the most recent 4 quarters compared to its peers.
  • Poor capital utilization: The company management has delivered below median return on invested capital in the most recent 4 quarters compared to its peers.
  • Poor return on assets: The company management has delivered below median return on assets in the most recent 4 quarters compared to its peers.
  • Highly leveraged: The company is in the bottom half compared to its sector peers on debt to equity and is highly leveraged.
  • Overpriced on free cash flow basis: The stock is trading high compared to its peers on a price to free cash flow basis. It is priced above the median for its sectors.

The FA score of  Canada Goose’s stock is set with a “Bearish” tone, with a score of 2.7 out of 10, where 10 is very bullish.

 

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