Deckers Outdoor is on a hot streak in an increasingly difficult environment for retailers as inflation pressures and economic concerns weigh on consumer spending. But the maker of Hoka brand shoes saw earnings accelerate the past three quarters. And analysts believe Deckers Outdoor can keep up that momentum. Meanwhile, footwear stocks chased Nike stock higher Wednesday as the Dow Jones giant sprinted during trading.
New Deckers Outdoor Coverage
Raymond James initiated coverage of Deckers Outdoor early Wednesday with an outperform rating on the shares.
"The company has a long track record of strong execution while its Hoka brand has strong momentum and is in the early innings of long-term growth globally," analyst Rick Patel wrote in a research note.
Patel said that Deckers' UGG brand remains attractive with long-term opportunities. However, industry headwinds in North America are rising, while the premium running category becomes "increasingly crowded." Raymond James placed a 565 price target on DECK stock — 15% above where shares closed Tuesday.
Deckers received a slew of price target raises after its major Q4 earnings beat on May 25. For its most recent results, earnings bolted 37.8% while net sales rose 7.5%, both well above expectations. HOKA brand sales soared 40.3% during the quarter. UGG brand sales dropped 16.1%.
Deckers management expects an 11.5% increase in fiscal 2024 earnings on an 8.9% gain in revenue. FactSet forecasts full-year earnings growth of 13.3% on a 12% advance in revenue.
Bank of America noted the company's "conservative" FY24 outlook offers a "high likelihood" of upward estimate revisions and presents a "particularly attractive buying opportunity," analyst Christopher Nardone wrote after results.
Wedbush raised its price target on DECK stock to 505 from 485 after Q4 earnings. UBS bumped its price target to 610 from 560, contending that Deckers Outdoor can maintain its high EPS growth rate.
Crocs Coverage
Raymond James is less bullish on clog and casual shoemaker Crocs. It initiated coverage on the stock with a market perform rating Wednesday. The firm likes the brand's long-term growth opportunities, particularly for international sales, non-clog categories and the HeyDude brand — despite recent deceleration. But the note pointed to difficult market conditions for North America and in wholesale, and projecting slower growth ahead in an "increasingly tough backdrop." Raymond James did not provide a price target for CROX stock.
DECK, CROX Stock
Nike jumped 5.7% Wednesday and lifted footwear stocks. The move put NKE stock even with its 200-day moving average for the first time since mid-May.
Deckers Outdoor stock surged nearly 3.3% Wednesday after slipping a fraction in early trading. Shares slid 2% to 490.72 in Tuesday's session. DECK stock sprinted 27% so far this year.
Skechers climbed 1.7% while On Holding ticked up %.
CROX stock traded sideways during Wednesday trading. Crocs stock has swung 5.8% higher in 2023.
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