On Thursday, Evercore ISI updated its financial outlook for Canada Goose (NYSE:GOOS), increasing the price target to $13 from $12, while retaining an In Line rating for the stock. The adjustment follows Canada Goose's fourth-quarter earnings, which exceeded expectations. The company reported earnings per share (EPS) of $0.19, surpassing both Evercore ISI's estimate of $0.09 and the general consensus of $0.06.
The stock's significant reaction, which was likely amplified by a high short interest and negative sentiment prior to the earnings release, caught analysts by surprise. Before the announcement, Canada Goose was trading at 12 times the next twelve months' (NTM) price-to-earnings (P/E) ratio. Following the market's response, the stock began trading at 15 times the fiscal year 2025 guidance.
The updated guidance for fiscal year 2025 incorporates more conservative inputs, which may have contributed to the positive shift in stock valuation. However, Canada Goose's decision to re-evaluate its fiscal year 2028 targets due to slower-than-expected progress in the unit economics of its direct-to-consumer (DTC) stores has introduced some uncertainty. This initiative is a significant part of the company's multi-year strategy.
Evercore ISI's stance remains at In Line as analysts await clearer indicators that could support a more durable and positive long-term thesis for Canada Goose's stock performance. The firm's current position reflects a cautious approach, pending further developments that could potentially enhance the stock's future prospects.
InvestingPro Insights
Following Evercore ISI's updated outlook on Canada Goose, current InvestingPro data provides additional context for investors considering the company's stock. With a market capitalization of $1.27 billion and a forward P/E ratio that has been adjusted to 29.1 for the last twelve months as of Q3 2024, Canada Goose's valuation reflects its growth potential. The company's gross profit margin stands impressively at 68.93%, underscoring its ability to maintain profitability despite market challenges.
InvestingPro Tips reveal that Canada Goose's management has been actively repurchasing shares, signaling confidence in the company's value. Additionally, the company's liquid assets surpassing short-term obligations suggest a strong financial position, which aligns with analysts' predictions of profitability for the year. For investors seeking more comprehensive insights, there are additional InvestingPro Tips available for Canada Goose at https://www.investing.com/pro/GOOS. Utilize coupon code PRONEWS24 to get an extra 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking further valuable investment tips.
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