Shares of Canada Goose Holdings Inc. were under pressure Thursday after an analyst at Wells Fargo downgraded the stock.
“While we remain confident on the trajectory of the GOOS brand and the fundamental story that has developed since their IPO in 2017, we feel the risk/reward today is not as compelling as it once was,” Wells Fargo Senior Analyst Ike Boruchow wrote.
Wells Fargo downgraded the stock to market perform from outperform, and lowered their price target to $68 from $80.
“Our revised view on the stock is multi-faceted – driven by changes in perception to the branded space, valuation and to a lesser extent engagement,” Boruchow wrote, noting that global brands have faced more challenges in recent months due to currency headwinds, tourism, a slowing Europe and risks in China.
The analyst also outlined concerns over Google search trends, citing data that revealed the number of searches for “Canada Goose” began to decline in the first quarter of 2019 after increasing at a double-digit rate in recent years.
The analyst added while Wells Fargo believes the fundamental growth story at Canada Goose remains “quite compelling,” the valuation will become more compelling as the brand matures.
As of 1:32 p.m. ET Thursday, shares of Canada Goose were trading 9.76 per cent lower at $59.79 on the Toronto Stock Exchange.
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