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Investing.com - Evercore ISI maintained its In Line rating and $110.00 price target on Deckers Outdoor (NYSE:DECK) on Monday, while removing the stock from its TAP Outperform List. According to InvestingPro data, Deckers maintains strong financial health with a perfect Piotroski Score of 9, despite the stock’s significant 52% decline over the past six months.
The decision comes amid bearish sentiment heading into Deckers’ F1Q26 earnings report, with investor concerns primarily focused on softness in the direct-to-consumer (DTC) channel for the company’s HOKA brand.
HOKA’s DTC growth slowed significantly to 3.1% year-over-year in F4Q25, down from 27% in F3Q25, with U.S. DTC sales showing a slight decline. Online data indicates DTC trends have not improved entering F1Q26, creating pressure as the company faces a challenging comparison against 33% DTC growth in the same quarter last year. Despite these challenges, the company maintains robust overall revenue growth of 16.3% and healthy margins, with a gross profit margin of 57.9%.
Evercore forecasts HOKA revenues to grow 11% in F1Q26, with DTC up just 1% and wholesale increasing 18%. For the UGG brand, which represents a smaller portion of first-quarter sales, the firm projects 8% revenue growth with DTC up 2% and wholesale rising 12%.
Despite removing Deckers from its TAP Outperform List, Evercore noted that checks suggest UGG brand momentum has remained stable throughout the quarter. InvestingPro analysis suggests the stock is currently undervalued, with analysts setting price targets ranging from $90 to $157. Get access to 10+ additional exclusive ProTips and comprehensive financial analysis for Deckers through the Pro Research Report, available on InvestingPro.
In other recent news, Deckers Outdoor is preparing for its upcoming earnings report, with several investment firms offering insights into the company’s prospects. Citi has reiterated a Buy rating and a $150 price target, projecting earnings per share of $0.73, which is above the consensus estimate of $0.69. This optimism is attributed to stronger UGG sales and gross margin performance. However, Citi anticipates weaker direct-to-consumer performance for the Hoka brand, forecasting a 1% decline compared to the 6% growth expected by the market. UBS also maintains a Buy rating but lowered its price target to $144, citing concerns over Hoka’s growth trends in the U.S. direct-to-consumer channel. BofA Securities has adjusted its price target to $114, maintaining a Neutral rating and highlighting uncertainty about Hoka’s sustainable growth. Stifel has kept a Hold rating with a $127 price target, noting that while Deckers exceeded expectations in several areas, Hoka’s revenue fell short of consensus estimates. Despite these mixed views, UBS analysts are confident in Deckers’ potential for double-digit revenue growth for the Hoka brand.
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