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Canada Goose Holdings Inc shares plummeted to a record low again in a row as economic and consumer pressures prompted a pair of analyst downgrades.
The parka retailer’s stock fell 4.4% to close at $12.16, recovering some of its losses after sinking as much as 9.8% intraday following downgrades from Wells Fargo & Company and TD Cowen. The analysts recommended investors move to the sidelines as the economic outlook for key markets sours while warmer than usual fall weather and weak customer trends are expected to weigh on sales.
TD Cowen analysts led by Oliver Chen pointed to cautious economic news out of China and Europe in a note downgrading the company to market perform from outperform and lowering the price target to $15 from $22.
They fear the outlook for China is poised to grow worse before it improves given the nation’s shaky real estate market, higher savings rate as consumers tighten purse strings and elevated youth unemployment rate. The analysts estimate that China makes up a quarter of Canada Goose’s sales, but tourism means Chinese clientele could make up a much larger portion.
Wells Fargo & Co analyst Ike Boruchow also downgraded the stock, reducing his team’s recommendation to equalweight from overweight and trimming the price target to C$20 from C$25.