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Investing.com - Stifel lowered its price target on Deckers Outdoor (NYSE:DECK) to $117 from $127 while maintaining a Hold rating, citing concerns about slowing growth in the company’s HOKA brand. The company, currently valued at $15.2 billion, trades at 15.6x earnings, which InvestingPro analysis suggests is attractive relative to its growth potential.
The firm noted that Deckers’ fiscal second-quarter results exceeded expectations with $13 million in revenue upside and earnings per share coming in $0.26 above estimates, driven by strength in the UGG brand and growth in wholesale and international segments. This performance aligns with the company’s robust financial health, reflected in its strong 57.6% gross margin and impressive 27.7% return on assets.
HOKA revenue growth decelerated to 11.1% year-over-year compared to 19.8% in the first quarter, with Stifel highlighting that the outlook for low double-digit percentage growth in the second half of fiscal 2026 may disappoint investors expecting mid-teens or higher growth.
Despite competitive pressures, Stifel projects low double-digit normalized topline growth for HOKA, supported by direct-to-consumer acceleration which improved to 8% growth from 3% in the previous quarter.
The firm’s revised $117 price target reflects a sum-of-the-parts valuation and represents 17 times Stifel’s fiscal 2027 earnings per share estimate of $6.90, with the analyst projecting high single-digit percentage topline growth and low double-digit earnings per share growth for the overall business.
In other recent news, Deckers Outdoor Corporation reported its financial results for the second quarter of fiscal year 2026, exceeding analyst expectations. The company posted earnings per share of $1.82, surpassing the forecasted $1.58. Revenue also came in higher than anticipated, reaching $1.43 billion compared to the expected $1.42 billion. Despite these positive results, Evercore ISI lowered its price target for Deckers Outdoor from $110.00 to $90.00 while maintaining an "In Line" rating. Evercore noted that while the company beat earnings expectations, the magnitude of these beats is decreasing. These developments reflect a mixed sentiment among analysts regarding the company’s growth trajectory. Investors are keeping a close eye on Deckers Outdoor as they assess the company’s recent performance and future prospects.
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