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On Friday, BofA Securities analyst Chris Nardone revised the price target on Deckers Outdoor (NYSE:DECK), a footwear and apparel company, to $128 from the previous target of $154. The revision comes as the stock has declined over 47% in the past six months, though InvestingPro data shows the company maintains strong fundamentals with a perfect Piotroski Score of 9. Despite the adjustment, the analyst has chosen to maintain a Neutral rating on the stock.
Nardone expressed reservations regarding the potential for HOKA, one of Deckers’ brands, to reignite growth in the competitive U.S. running market following a deceleration in sales during the fourth quarter. While the company shows robust financial health with more cash than debt and a strong current ratio of 3.72, the analyst highlighted that the coming months would be pivotal in assessing the brand’s vitality, especially as issues with legacy product inventory clearance, which had previously impeded growth, are being resolved.
The analyst anticipates a possible boost in sales with the expanded variety of color options for HOKA’s Clifton and Bondi shoe lines. Initially launched with approximately six colors, these models now feature around 12 to 15 color variations. However, Nardone remains unconvinced that new developments in these lines will significantly accelerate growth and has forecasted a 13% growth for HOKA in Fiscal Year 2026.
For UGG, another brand under Deckers Outdoor, fourth-quarter sales saw a 4% increase, attributed mainly to a 14% rise in wholesale operations, despite a 3% drop in direct-to-consumer sales. The company’s overall revenue growth remains strong at 16.28%, with healthy margins at 57.88%. Before tariffs were introduced, management had projected mid-single-digit growth for UGG. Nardone suggests that a strong holiday season last year could lead to substantial order volumes and, along with pricing strategies, might enable UGG to surpass its growth algorithm. Current trends indicate improved availability of key UGG products. A 7% growth is forecasted for UGG in Fiscal Year 2026, although the analyst cautions that pricing actions could potentially dampen consumer demand.For deeper insights into Deckers’ financial health and growth prospects, including 12 additional exclusive ProTips and comprehensive valuation metrics, visit InvestingPro.
In other recent news, Deckers Outdoor Corporation has seen several adjustments to its stock price targets from various analysts following its fourth-quarter earnings report. Truist Securities reduced its price target to $130, maintaining a Buy rating, citing a sharp deceleration in HOKA brand sales and the absence of financial guidance for the upcoming fiscal year. Williams Trading also lowered its target to $129, highlighting mixed fourth-quarter results with HOKA sales underperforming while UGG exceeded expectations. TD Cowen adjusted its target to $157, maintaining a Buy rating, and noted that while Deckers surpassed revenue and earnings expectations, its initial guidance for the next quarter fell short of forecasts.
Needham analysts revised their price target to $120, acknowledging a slowdown in HOKA’s direct-to-consumer sales despite the company exceeding quarterly guidance. Stifel maintained a Hold rating with a $127 target, noting significant UGG brand revenue growth but concerns over HOKA’s missed revenue estimates. Deckers announced an ambitious $2.25 billion share repurchase program, reflecting confidence in its stock value. The company’s decision not to provide full-year guidance due to uncertainties around U.S. trade policy and tariffs has been a common theme among analysts. These recent developments highlight the cautious sentiment surrounding Deckers as it navigates current challenges and potential growth opportunities.
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