Street Calls of the Week
Investing.com - Needham lowered its price target on Deckers Outdoor (NYSE:DECK) to $113.00 from $128.00 on Friday, while maintaining a Buy rating on the stock. According to InvestingPro data, the stock is currently trading at a P/E ratio of 15.6x, suggesting potential undervaluation relative to its growth prospects.
The price target reduction follows Deckers’ second-quarter fiscal 2026 earnings report, which beat expectations but still triggered a negative market reaction in Thursday’s after-hours trading. Despite market concerns, InvestingPro analysis shows the company maintains strong financial health with a "GREAT" overall rating and holds more cash than debt on its balance sheet.
According to Needham, the main concern centers around the UGG brand, which experienced a "major deterioration" in direct-to-consumer trends, overshadowing positive developments from the company’s Hoka footwear line.
Deckers reported 9% revenue growth for the quarter, approximately 100 basis points above guidance, while earnings per share reached $1.82, exceeding the company’s guidance range of $1.50-$1.55.
Needham adjusted its fiscal 2026 and 2027 earnings per share estimates to $6.36 and $7.00, respectively, compared to previous forecasts of $6.28 and $7.10, while Deckers introduced fiscal 2026 guidance projecting earnings per share between $6.30 and $6.39.
In other recent news, Deckers Outdoor Corporation reported impressive financial results for the second quarter of fiscal year 2026. The company surpassed analyst expectations with earnings per share of $1.82, exceeding the forecasted $1.58, and revenue reaching $1.43 billion against an anticipated $1.42 billion. Despite these strong results, Stifel has lowered its price target for Deckers Outdoor to $117, citing concerns over slowing growth in the HOKA brand, although the firm maintained a Hold rating. Similarly, Evercore ISI reduced its price target to $90 from $110, maintaining an "In Line" rating and noting a diminishing magnitude of earnings beats. Deckers’ fiscal second-quarter results were bolstered by the strength in the UGG brand and growth in both the wholesale and international segments. Revenue growth was reported at 9%, slightly above the analyst expectation of 8%. These developments highlight ongoing investor and analyst scrutiny despite the company’s recent financial performance.
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