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Dec 16, 2021

RBC raises Aritzia price target amid 'strong inventory'

Our retail sales have surpassed pre-pandemic levels: Aritzia CEO

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Shares of Aritzia Inc. moved higher Thursday morning, after RBC Capital Markets raised its price target on the Canadian fashion brand.

Analyst Irene Nattel cited “solid inventory” in a note sent to clients, raising her price target to $52.00 per share from $44.00.

“In our view, solid inventory heading into the quarter positions ATZ well to meet consumer demand despite supply chain challenges,” she wrote, while also noting that Canadian’s spending appetite appears strong with the crucial holiday shopping period fast approaching.

“RBC credit card data for Canada suggests online shopping strength continues so far in FQ4 with a notable increase ahead of the holidays.”

In October, Vancouver-based Aritzia revealed results for the quarter ending Aug. 29. The company beat profit estimates by a wide margin, and the stock took off after raising its revenue estimates for the third quarter. 

Results for the company’s fiscal third quarter will be released mid-January.

Aritzia’s strong brand has helped it withstand some of the COVID-related business restrictions that have dogged so many of its retail rivals, said Nattel. Company shares are up more than 100 per cent from one year ago.

“Aritzia’s successful pivot online since the beginning of the pandemic is largely offsetting the drag from restrictions and boutique closures,” said Nattel. “Even against the backdrop of significant regional capacity restrictions, boutiques are nearing prior-year productivity levels, with the slack largely offset by ongoing momentum in the company’s online channel.”