Call Traders Blast Soaring Canada Goose Stock

Canada Goose raised its full-year forecast

Deputy Editor
Nov 5, 2021 at 10:17 AM
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Canada Goose Holdings Inc (NYSE:GOOS) stock is ripping up the charts this morning, following the outerwear company's impressive fiscal second-quarter earnings report. The company shared a surprise profit of C$0.12, which is much higher than the C$0.10 loss expected by analysts. The firm's revenue also topped estimates, thanks to strong demand for its parkas ahead of the holiday season, and growing sales in China. Additionally, Canada Goose raised its full-year forecast. At last check, GOOS is up 13.3% to trade  at $45.82

Call traders are buying up Canada Goose stock, in response. In the first hour of trading, the security's normally quiet options pits are seeing 14 times the typical amount of call activity taking place, with 1,918 calls across the tape. For comparison, just 305 puts have exchanged hands so far. Most popular by a wide margin is the December 45-strike call, where new positions are being opened, while the 11/5 50-strike call, which expires at the end of today's session, also has new positions opening up.

Analysts have yet to chime in on GOOS, though this could change. Presently, the brokerage bunch is split, with three calling the stock a "strong buy," and three saying "hold" or worse. Meanwhile, the 12-month consensus price target of $48.47 is a 19.9% premium to last night's close. 

It's been a rocky couple of months for GOOS, since the security suffered a bear gap following its last earnings report in August, though the 320-day moving average kept some of its pullbacks in check. The security has closed this gap today, however, and hit an eight-month high right out of the gate. 

Shorts began to hit the exits ahead of Canada Goose's earnings event, shedding 2.5% in the last reporting period, though a further unwinding could put additional wind at the stock's back. The 3.76 million shares sold short make up 6.4% of the stock's available float, and it would take nearly a week to cover these bearish bets, at the equity's average daily pace of trading.

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