Canada Goose Cut to Sell by Goldman Sachs on Valuation

TheStreet2020-12-10

Canada Goose( GOOS ) - Get Reportshares slid Thursday after Goldman Sachs analyst Alexandra Walvis downgraded the Toronto apparel maker to sell from neutral, though raised her price target to $26 from $25.

She’s concerned about valuation in light of the stock’s 28% run-up from Sept. 10 through Wednesday. Canada Goose recently traded at $31.19, down 3.23%.

Momentum indicators were mixed for the company on Instagram, WGSN surveys and Google Trends data through November, Walvis said, according to Bloomberg. That likely constitutes a “headwind to near- and medium-term growth," Walvis said.

Warm weather over the beginning of the holiday season will likely put a damper on demand for winter coats, she said. Tourist spending also is likely to remain “muted,” especially in China.

Walvis expects the apparel business to bounce back in 2021, but the “rising tide will not, in our view, lift all boats,” she said. “Strong brands with upside as they shift from wholesale to “direct-to-consumer-online” will reap the rewards.

Walvis upgraded her ratings on both Ralph Lauren( RL ) - Get Reportand Levi Strauss( LEVI ) - Get Reportto buy from sell. She upgraded Capri( CPRI ) - Get Report, which includes Versace and Jimmy Choo, to buy from neutral and( PVH ) - Get Report, which includes Tommy Hilfiger and Calvin Klein, to neutral from sell. She reiterated buy ratings on Nike( NKE ) - Get Reportand VF( VFC ) - Get Report, which includes North Face and Timberland.

Walvis reiterated sell ratings on Macy's( M ) - Get Report, Nordstrom( JWN ) - Get Reportand Gap( GPS ) - Get Report, noting her caution on “brick-and-mortar led wholesalers and specialty retailers.” She downgraded Kontoor Brands( KTB ) - Get Report, which includes Wrangler and Lee, to neutral from buy.

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