May 20, 2019 / 12:33 PM / 7 months ago

BUZZ-Canada Goose: HSBC starts coverage, see strong growth 3 years on

** HSBC starts coverage of Canada Goose Holdings Inc with “buy” rating and PT of $62, a ~28% upside to last close

** Canadian retailer’s dozen stores and limited presence outside N.America imply strong growth 3 years out, write analysts, calls Canada Goose a “straightforward roll out story”

** HSBC disagrees with investor fear that the brand was over-extending itself with 6 new stores for 2019

** HSBC says long-term risks include new entrants with China exposure that could pose a margin risk eventually; other risks include animal welfare protests and brand ubiquity

** Now that the brand recognition has developed strongly, we believe there is a need for the company to diversify designs more to avoid falling into the ubiquity trap that some luxury brands like Louis Vuitton fell into a decade ago - HSBC

** HSBC expects co to update its outlook for the next three years, which could act as a positive catalyst for shares that have gone sideways for the past 12 months

** Co will report its FY March 2019 results in the next three weeks

** Up to Friday’s close, stock up ~11% YTD (Reporting by Shanti S Nair in Bengaluru)

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