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Investing.com - BofA Securities has lowered its price target on Deckers Outdoor (NYSE:DECK) to $114 from $128 while maintaining a Neutral rating on the stock. The footwear company, currently valued at $14.63 billion, is trading near its 52-week low of $93.72, though InvestingPro analysis suggests the stock may be undervalued at current levels.
The price target reduction reflects BofA’s slightly lower forecast for HOKA direct-to-consumer (DTC) sales, leading the firm to adjust its valuation multiple to 18x fiscal 2027 price-to-earnings ratio, down from 20x previously. Despite the reduced target, InvestingPro data shows the company maintains strong fundamentals with a perfect Piotroski Score of 9 and healthy revenue growth of 16.28% over the last twelve months.
BofA sees a balanced risk/reward profile for Deckers, noting that potential margin improvements and UGG brand upside could be offset by uncertainty around whether HOKA can return to sustainable growth in US direct-to-consumer channels.
For the first quarter, BofA forecasts earnings per share of $0.66, slightly below the consensus estimate of $0.68, with projections of 12% growth for the HOKA brand and 8% growth for UGG.
The firm maintains that HOKA’s ability to achieve sustainable DTC growth in the United States remains a key factor that could prevent material multiple expansion for Deckers stock.
In other recent news, Deckers Outdoor is preparing to release its first-quarter earnings report, with Citi maintaining a Buy rating and a price target of $150. Citi projects Deckers to surpass consensus earnings per share estimates, primarily due to robust UGG sales and improved gross margins. Despite some challenges in the direct-to-consumer segment of the Hoka brand, Citi still anticipates a 13% sales growth driven by strong wholesale demand. UBS also reiterated its Buy rating with a price target of $169, expressing confidence in Deckers’ ability to achieve double-digit sales growth, particularly for the Hoka and UGG brands.
Stifel, on the other hand, has maintained a Hold rating with a price target of $127, noting that while Deckers’ recent performance exceeded expectations, concerns remain over Hoka’s sales deceleration. BofA Securities revised its price target for Deckers to $128, maintaining a Neutral stance due to uncertainties in Hoka’s growth within the U.S. market. Truist Securities also adjusted its price target to $130, while retaining a Buy rating, citing the sharp decline in Hoka’s sales and the absence of financial guidance as factors contributing to investor caution. These developments underscore the varying perspectives among analysts regarding Deckers Outdoor’s future performance and growth potential.
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