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Barclays (LON:BARC) upgraded Groupe Dynamite Inc (GRGD:CN) stock rating from Equalweight to Overweight on Tuesday, raising its price target to Cdn$26.00 from Cdn$15.00. The upgrade follows the Canadian fashion retailer’s first-quarter earnings report that triggered an 18.8% stock surge on Monday.
The research firm cited four key factors supporting its more positive outlook, including lower U.S. tariff policy compared to the previous 145% rate. Barclays also noted evidence of successful price increase implementation with minimal demand impact, positioning the company’s Garage and Dynamite brands as market share winners in a rising price environment.
Barclays identified fixed cost structural leverage from U.S. store expansion as another positive factor, which helps mitigate potential variable cost tariff headwinds. The firm also highlighted a positive sales-to-inventory growth inflection in the first quarter of 2025 as its fourth reason for the upgrade.
The upgrade comes despite Barclays acknowledging potential U.S. consumer slowdown concerns for the second half of 2025 and ongoing tariff uncertainty. The firm expressed "greater confidence in company-specific growth drivers to offset a volatile macroeconomic outlook."
Groupe Dynamite shares significantly outperformed the broader market on Monday following its earnings release, gaining 18.8% while the S&P 500 declined 0.8%.
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