Barclays cuts Canada Goose stock rating, lowers target to $8

Monday, Barclays (LON:BARC) analysts made a significant change to Canada Goose’s stock (NYSE:GOOS) outlook, downgrading the luxury apparel company from Equal Weight to Underweight. Alongside the rating change, they also reduced the price target from $10.00 to $8.00. The stock, currently trading at $8.24, sits near its 52-week low of $8.16 and has declined over 34% in the past six months. According to InvestingPro analysis, the stock appears undervalued at current levels. The downgrade stems from a variety of factors that Barclays expects to negatively impact Canada Goose’s performance throughout 2025.

The analysts at Barclays have expressed concerns over several issues facing Canada Goose. They anticipate the competitive landscape and geopolitical factors to be particularly challenging for the company. According to the firm, the relative downgrade is based on expectations that Canada Goose will have fewer opportunities to outperform within their sector coverage. Despite these concerns, InvestingPro data shows the company maintains impressive gross profit margins of 68.22% and a healthy current ratio of 2.01, indicating strong operational efficiency and solid short-term liquidity.

Barclays highlighted five key reasons for their decision: global macroeconomic pressures, increasing competition from other outerwear brands, significant exposure to tariff risks due to its reliance on Canadian production, revenue volatility from high seasonality and a growing direct-to-consumer mix, and difficulties in expanding product categories beyond its core heavyweight down offerings.

The analysts noted that while Canada Goose’s recent drop in share price and valuation may already account for some of these concerns, they foresee the stock trading within a range in the near term. Additionally, they warned of potential risks to the company’s financial estimates should competitive pressures continue to mount and if tariff risks become more pronounced.

The downgraded rating and lower price target reflect Barclays’ cautious stance on Canada Goose’s future stock performance, considering the outlined challenges that may affect its market position and financial results. While Barclays has taken a bearish stance, the broader analyst community maintains targets ranging from $7 to $11, with five analysts recently revising earnings estimates upward. For deeper insights into Canada Goose’s valuation and growth prospects, including exclusive financial health scores and detailed analysis, check out the comprehensive Pro Research Report available on InvestingPro.

In other recent news, Canada Goose reported fourth-quarter earnings that exceeded analyst expectations, with adjusted earnings per share reaching C$1.51, surpassing the consensus of C$1.10. However, the company’s revenue fell short, coming in at C$607.9 million against the projected C$615.24 million, marking a 2.2% year-over-year decline on a constant currency basis. Barclays analyst Adrienne Yih responded to these results by lowering the stock’s price target to $10.00 from $11.00, citing underperformance in sales, gross margin, and operating margin. Meanwhile, CFRA analyst Zachary Warring raised the price target to $11.00, maintaining a Hold rating, and noted the company’s trading position is below its average forward price-to-earnings multiple. Raymond (NSE:RYMD) James reiterated a Market Perform rating, emphasizing the need for better consistency in Canada Goose’s performance and highlighting the growth in gross margin percentage. Additionally, Perfect Moment Ltd., another player in the luxury outerwear market, announced the appointment of former Canada Goose executives to strengthen its product development and production team. This strategic move aims to enhance Perfect Moment’s position in the luxury outerwear sector. These developments reflect ongoing challenges and strategic shifts within the industry.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.