Benzinga - While shares in the apparel, footwear and fitness segment have risen year to date, consumer spending may soften and companies could miss 2023 consensus estimates, according to Baird.
The Downgrades: Analyst Jonathan Komp downgraded the ratings for Canada Goose Holdings Inc (NYSE: GOOS), Peloton Interactive Inc (NASDAQ: PTON) and VF Corp (NYSE: VFC) from Outperform to Neutral.
“Better-than-feared Q4 pre-announcements, positive January signals, past-peak inventory, and other sources of optimism (China reopening, weaker USD) have spurred recent risk appetite (2022 laggards, higher shorted stocks outperforming),” Kom wrote.
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“We project C2023E/C2024E EPS well below consensus embedding macro-related concerns, and are using strength to reduce several low-conviction near-term ideas,” he added.
- The Canada Goose Thesis: The stock valuation reflects tailwinds from “a full return of global Chinese consumer spending, straight-line margin recovery, and favorable updates with the upcoming February 7 investor day,” Komp wrote.
- The Peloton Interactive Thesis: The analyst lowered the price target from $14 to $12, while adding that the macro environment could cause the company to “guide FQ3E (March) below consensus and lengthen the time needed to restore healthy profitability.”
- The VF Corp Thesis: There are macroeconomic headwinds and external pressures that could “lengthen the time needed to drive better financial performance, Komp said in the note.
Image Courtesy of Canada Goose
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