Canada Goose Holdings Inc. (GOOS:TSX)(GOOS:NYE) Analysts cut target on earnings

Canada Goose Holdings Inc. Stock Analysis:

Analysts today responded in kind to the company’s latest currently results which were released:

STA Research upgraded Canada Goose Holdings Inc. to a Buy rating and maintains the company’s target price at $32.00.

TD Research lowers the target price on Canada Goose Holdings Inc. to $40 from $49 and maintains the Buy rating for the luxury outdoor wear Company.

CIBC Capital Markets maintains the Neutral rating and lowers the target price on the company’s stock to $30 from $36.

The average analyst target price for Canada Goose Holdings Inc. over the next 12 months, based on the stock projections from 8 analysts, is CAD 36.50. The average analyst rating for Canada Goose Holdings Inc. is Buy. Based on 9 positive and 8 negative signs, Stock Target Advisor’s personal stock analysis of Canada Goose Holdings Inc. is Neutral. The stock price of Canada Goose Holdings Inc. was CAD 20.32 at the most recent close. The share price of Canada Goose Holdings Inc. has changed by -14.73% in the last week, -3.33% in the last month, and -57.99% in the last year.

Canada Goose Holdings Inc. News:

As COVID-19 limitations in China and concerns about the global economy weigh on the company, Canada Goose Holdings Inc., a manufacturer of high-end outdoor wear, has reduced its earnings projections for the year.
“There is no doubt that the macroeconomics backdrop continues to present challenges”, Canada Goose’s chairman and CEO Dani Reiss said during a conference call with financial analysts on Wednesday.

Reiss claimed that as the business enters its most lucrative quarter, the disruptions are starting to have an impact in an increasing number of the cities where Canada Goose operates. From earlier projections of between $1.3 billion and $1.4 billion, the upmarket outdoor apparel manufacturer now anticipates overall revenue for its current fiscal year to be between $1.2 billion and $1.3 billion.

In its most recent quarter, Canada Goose posted a profit of $3.3 million, or three cents per diluted share, down from the same quarter previous year’s $9.9 million, or nine cents per diluted share.   For the three months that ended on October 2, revenue was $277.2 million, up from $232.9 million in the same period last year. In its most recent quarter, Canada Goose reported an adjusted profit of 22 cents per share, up from an adjusted profit of 13 cents per diluted share a year earlier.

According to CIBC Capital Markets analyst Mark Petrie, Canada Goose’s most recent quarter’s revenue was above forecasts thanks to a growth in wholesale, which was slightly offset by slower direct-to-consumer sales.

Regarding the company’s revised outlook, he claimed that COVID regulations in China are the main cause. Petri wrote in a client note that “The revised outlook also factors in broader macroeconomic and political uncertainty”.

Fundamental Stock Analysis:

Positive Fundamentals:

High market capitalization is something we like.  This organization is among the top quartile and is one of the biggest in its industry. These businesses are typically more reliable.

Excellent return on equity.  The management of the company has outperformed its competitors in terms of return on equity over the last four quarters, ranking it in the top quartile.

Superior capital efficiency.  In the last four quarters, firm management outperformed its counterparts in terms of return on invested capital, putting it in the top quartile.

Excellent return on assets.  The management of the company has outperformed its counterparts in terms of return on assets over the last four quarters, putting it in the top quartile.

A healthy cash flow.  The last four quarters saw positive total cash flow for the organization.

A favourable free cash flow.  The last four quarters saw the company generate positive total free cash flow.

This stock is unreasonably cheap based on free cash flow.  On a price to free cash flow ratio, the stock is trading at a low price compared to its peers and is in the top quartile. Although it can be priced too low, be sure there isn’t a specific explanation by looking at its financial performance.

Superior growth in revenue.  Compared to its industry, this stock’s revenue growth over the previous five years has been in the top quartile.

High Asset to Gross Profit Ratio.  When compared to its rivals, this stock’s Gross Profit to Asset Ratio is in the top quartile. Value investors choose this metric because it exhibits superior long-term returns.

Negative Fundamentals:

Subpar risk-adjusted returns.  In comparison to its rivals, this company’s risk-adjusted return performance is below average. The returns are unpredictable, even if it is outperforming in terms of returns.

High turbulence.  Over the past five years, this company’s total returns have been erratic and higher above the industry average. If you plan to invest in such a stock, be sure your risk tolerance is adequate.

Lower than average dividend returns.  In comparison to its competitors, the company’s average income yield during the past five years has been low. If you are not seeking for work, it is not an issue.

Excessive in comparison to wages.  The stock is trading above the sector median and at a premium to its peers in terms of price to earnings.

Compared to book value, it is overpriced.  On a price to book value basis, the stock is selling at a premium to the median of its peer group.

Overpriced based on cash flow.  On a price to cash flow ratio, the stock is trading at a premium to that of its competitors. Its pricing is higher than the sector median.

Extremely leveraged.  In terms of debt to equity, the company is heavily leveraged and in the bottom half of its sector rivals. Check the news, though, and study the sector and management remarks. This can be high at times since the business is attempting to grow quickly.

Priced excessively based on free cash flow.  On a price to free cash flow basis, the stock is trading at a premium to that of its competitors. Its pricing is higher than the sector median.

Canada Goose’s stock is currently rated with a fundamental score of 5.3 out of 10, where 0 is very bad and 10 is very good.