Mostly Trapping

Baird bullish on beat-up Canada Goose
Feb 10, 2020 15:22 ET

[Reprinted from original]

Baird lifts Canada Goose (GOOS -4.2%) to an Outperform rating on its view that peak China concerns are now embedded in the share price.

"We were encouraged to see GOOS only fall modestly after cutting EPS estimates >20% on coronavirus. While the report did not resolve several bear arguments/concerns, getting past the estimate reset is an important step, and we see potential for the intensity surrounding several debates to lessen during F2021," writes analyst Jonathan Komp.

Komp sees limited downside with GOOS trading near luxury brand peers on the lowered estimates and reminds that shares could double if GOOS returns to its longer-term algorithm and recaptures lost China/Hong Kong contribution.

Komp's upgrades cuts against the grain a bit, with both Goldman Sachs and Cowen downgrading the stock to Hold-equivalent ratings today.