Barclays upgrades Canada Goose on improving fundamentals, tariff insulation

Investing.com -- Barclays upgraded Canada Goose to Equal Weight from Underweight, saying the luxury outerwear maker’s operational improvements, cleaner inventory, and reduced tariff exposure present a more balanced risk-reward profile heading into 2025.

The brokerage raised its price target to $14 from $11, citing expectations of stable earnings and better margin execution supported by Canadian-based manufacturing, which limits exposure to U.S. trade tariffs affecting Asian-made apparel.

Company-specific drivers are expected to support fundamental performance in 2025, according to Barclays given the improving margins, positive inventory positioning, and the potential for stronger full-price sell-through with lower clearance levels.

The firm kept its earnings estimates unchanged, with FY26 adjusted EPS forecast at C$1.04, slightly above consensus.

Barclays assigns a 17x multiple to its 2026 earnings view, slightly below the Street average, reflecting ongoing macroeconomic uncertainty and competition.

While acknowledging risks from global demand softness, high seasonality, and competition from both performance and luxury peers, Barclays flagged potential upside from strategic optionality, including a financial or strategic takeout, and stronger consumer traction following the appointment of Creative Director Haider Ackermann.

The company launched its Snow Goose collection in late 2024 to positive early feedback.

Canada Goose shares are down over 30% year-to-date, underperforming peers, as investors remain cautious on discretionary demand.

Barclays’ upgrade comes as the firm sees the stock’s downside more limited and the valuation more reasonable following the reset.

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