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On Thursday, BMO Capital Markets adjusted its outlook on Aritzia (ATZ:CN) (OTC: OTC:ATZAF), a fashion retailer, by reducing its price target from Cdn$74.00 down from Cdn$80.00. Despite this change, the firm maintained its Outperform rating on the company’s shares. Currently trading at $30.13, the stock has experienced a challenging year with an 18.37% YTD decline, according to InvestingPro data.
Analysts at BMO Capital indicated that their recent web traffic analysis from March 25 has yielded positive insights. Aritzia’s total web traffic in March increased by 13%, demonstrating a slight deceleration from the 15% growth observed in February. The Canadian market showed consistent performance with no growth change compared to February, while the U.S. market continued to show strong results with a 28% increase, albeit slightly lower than the 34% increase in the previous month. This digital momentum aligns with the company’s overall revenue growth of 10.36% over the last twelve months, with InvestingPro analysis showing strong financial health metrics.
The sustained growth in web traffic is attributed to consumer engagement with Aritzia’s new spring product launches. BMO analysts believe that the company’s ability to attract and retain customers is a testament to the strength of its brand, the diversity of its sourcing, and the appeal of its Everyday Luxury value proposition.
Despite the positive web traffic trends, BMO Capital has adjusted Aritzia’s price target to reflect the broader sector’s multiple compression. This adjustment is due to the heightened risks associated with tariffs, which remain a variable factor in the industry. However, the analysts expressed confidence in Aritzia’s capability to effectively navigate these challenges, given its strong brand momentum and strategic positioning.
In other recent news, Aritzia has been the subject of positive analyst coverage, with both Desjardins and Jefferies initiating Buy ratings on the company. Desjardins set a price target of C$82, highlighting Aritzia’s potential for significant earnings per share growth, projecting approximately 40% growth in fiscal year 2026 and around 20% growth in fiscal year 2027. This optimistic outlook is attributed to factors such as industry growth, increasing brand awareness, and strategic store expansions. Meanwhile, Jefferies set a slightly higher price target of Cdn$85, emphasizing Aritzia’s opportunities for store and sales channel expansion, as well as improving profit margins. The firm noted the potential for real estate growth in the United States as a key driver for the company’s long-term targets. Both analysts acknowledged Aritzia’s strong financial position and strategic initiatives, which could enhance shareholder value. These recent developments suggest a strong conviction in Aritzia’s growth prospects and market position.
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