The stock of Canada Goose (GOOS) is up 15% on reports the company is about to be taken private.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Toronto-based Canada Goose is majority-controlled by U.S. private equity firm Bain Capital, which has hired investment bank Goldman Sachs (GS) to help it sell its stake in the luxury parka maker. According to media reports, Boyu Capital and Advent International have made verbal offers to buy Canada Goose at a valuation of about $1.35 billion.
Bain Capital is hoping to receive other offers for Canada Goose in coming weeks, but plans to finalize a deal for the retailer within two months. Canada Goose’s sales and stock have struggled in recent years as demand for its winter parkas declines with global temperatures rising.
Struggling Stock
Canada Goose went public in 2017 and the shares peaked in 2018 when the company’s market capitalization reached $7.70 billion. Since the Covid-19 pandemic ended, sales at Canada Goose have been in freefall. The company has tried to diversify into sunglasses and other luxury products but the results have been mixed.
A push into China’s luxury goods market has also proved costly for Canada Goose. For its part, Bain Capital acquired its majority stake in Canada Goose for $250 million in 2013 when the parka maker was still a private concern. Despite the rise on Aug. 27, GOOS stock is still down 52% over the past five years.
Is GOOS Stock a Buy?
The stock of Canada Goose has a consensus Hold rating among nine Wall Street analysts. That rating is based on three Buy, three Hold, and three Sell recommendations issued in the last 12 weeks. The average GOOS price target of $12.61 implies 9% downside from current levels.
