OXM - Aritzia lands Buy rating at UBS Guess started at Hold
2023-06-16 10:24:37 ET
Shares of Canadian women’s fashion retailer Aritzia ( ATZ:CA ) rose on Friday as UBS took a bullish view of the company’s prospects.
The team said that the company’s spending on “differentiated store concepts, increasing relevance among consumers, diversified product assortment, and focus on in-store experience” should drive strong comparable sales growth in quarters ahead. As such, UBS started coverage of the stock at Buy.
“We think the market is too concerned on near-term margin pressures and does not appreciate the cost re-leverage opportunity post [2023],” the team told clients. “Our C$51 Price Target is 39% above the current stock price and we see close to 3:1 upside/downside skew.”
Shares of Aritzia ( OTCPK:ATZAF ) rose 1.98% shortly after Friday’s market open.
Elsewhere, both Oxford Industries ( NYSE: OXM ) and Guess ( GES ) were initiated with Hold-equivalent ratings. For the former, “steady growth seems priced in” which leaves upside limited. For Guess ( GES ), risks remain in the turnaround plan charted by management, holding back a more bullish outlook.
“We think GES is on the right path to stabilize operating margins while delivering [low-single-digit percentage] sales growth,” the team wrote. “However, we believe a challenging retail environment will negatively impact its Americas business and slow CY23 EPS growth.”
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Aritzia lands Buy rating at UBS, Guess started at Hold