On Thursday, BMO Capital Markets adjusted their financial outlook on Aritzia (ATZ:CN) (OTC: OTC:ATZAF), increasing the price target to Cdn$65.00 from the previous Cdn$60.00, while reaffirming an Outperform rating on the company's shares. The adjustment follows an analysis of web traffic data which indicated a marked improvement in December. This optimism aligns with the company's strong market performance, as InvestingPro data shows Aritzia has delivered an impressive 103.7% return over the past year, with the stock currently trading near its 52-week high of $41.15.
According to BMO Capital's analysis, Aritzia experienced a 32% year-over-year increase in web traffic in December, a significant uptick from the 13% increase observed in November. The data also highlighted that Canada saw a return to growth for the first time in half a year, posting a 3% increase. In the U.S., the growth rate accelerated, with a remarkable 78% increase compared to 36% in November.
The analyst at BMO Capital noted that the robust web traffic suggests a strong start to Aritzia's fiscal fourth quarter. This performance is attributed to a positive consumer response to the company's increased marketing efforts and the launch of three significant flagship stores between late November and mid-December.
BMO Capital believes that Aritzia is well-positioned to capitalize on its substantial growth opportunities in the U.S. market. The raised price target to Cdn$65.00 reflects the firm's confidence in Aritzia's strategic initiatives and potential for continued growth.
However, investors should note that according to InvestingPro's Fair Value analysis, the stock appears overvalued at current levels, trading at a relatively high P/E ratio of 63.5x. For deeper insights into Aritzia's valuation and growth prospects, including 15+ additional ProTips and comprehensive financial metrics, subscribers can access the full Pro Research Report.
In other recent news, Aritzia Inc (TSX:ATZ). reported a 15% increase in net revenue for Q2 of fiscal 2025, reaching $616 million. U.S. sales surged by 24% due to real estate expansion and e-commerce growth, while Canadian sales grew by 6%. The company revised its full-year revenue outlook to $2.54 billion to $2.6 billion and projected Q3 net revenue between $675 million and $700 million.
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