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Investing.com - Wells Fargo (NYSE:WFC) has lowered its price target on Deckers Outdoor (NYSE:DECK) to $90.00 from $100.00 while maintaining an Equal Weight rating, citing competitive pressures on the company’s Hoka brand. The stock, which has declined over 52% in the past six months according to InvestingPro data, maintains strong fundamentals with a perfect Piotroski Score of 9.
The firm points to Nike (NYSE:NKE)’s renewed focus on performance running, which has made a "significant dent in Hoka momentum," with Nike’s brand heat for models like Vomero and Pegasus trending approximately 100% higher in recent months while Hoka trends negative. Despite these challenges, InvestingPro data shows Deckers maintains robust financial health with a current ratio of 3.72 and 16.28% revenue growth over the last twelve months.
Wells Fargo also expressed concern about clearance timelines for Hoka’s Clifton 9 and Bondi 8 models, noting that despite management’s mid-May comments suggesting inventory would not be a "hangover into Summer," markdown products and rates have persisted through July. According to InvestingPro’s Fair Value analysis, the stock appears undervalued at current levels, with 10+ additional ProTips available for subscribers.
The analyst lowered first-quarter revenue expectations below consensus, projecting Hoka’s direct-to-consumer sales to grow just 2%, well below the Street’s 9% estimate, driven by ongoing declines in the U.S. market despite international strength.
Wells Fargo also highlighted potential margin pressure from increased Vietnam tariffs (from 10% to 20%), estimating an approximately 100 basis point annualized impact on Deckers’ margins, and reduced its fiscal year earnings per share forecast to $5.85, below the Street’s $6.05 estimate.
In other recent news, Deckers Outdoor has been the focus of multiple analyst reports ahead of its first-quarter earnings release. Evercore ISI maintained an In Line rating but removed Deckers from its TAP Outperform List due to concerns about slowing growth in the HOKA brand’s direct-to-consumer (DTC) channel. Despite this, Evercore forecasts HOKA revenues to grow 11% in the first quarter, with wholesale sales increasing by 18%. UBS lowered its price target for Deckers to $144, citing similar concerns about HOKA’s DTC growth, but maintained a Buy rating. BofA Securities also reduced its price target to $114, maintaining a Neutral rating, while expressing concerns about the sustainability of HOKA’s growth in the US DTC market. Citi, on the other hand, reiterated a Buy rating with a $150 price target, expecting Deckers to exceed earnings per share estimates due to strong UGG sales and gross margin performance. UBS analysts also reaffirmed their Buy rating, maintaining a $169 price target, and expressed optimism about Deckers’ potential for double-digit sales growth, driven by the HOKA and UGG brands. These developments highlight varying analyst perspectives on Deckers Outdoor’s performance and growth potential.
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