Skechers stock rating cut to Equalweight at Morgan Stanley

Published 07/05/2025, 05:52
Skechers stock rating cut to Equalweight at Morgan Stanley

On Wednesday, Morgan Stanley (NYSE:MS) adjusted its stance on Skechers USA (NYSE:SKX) stock, downgrading the rating from Overweight to Equalweight and revising the price target to $63 from the previous $73. The change in rating follows the recent announcement by Skechers regarding its acquisition by 3G Capital. The stock has shown remarkable momentum, with InvestingPro data showing a 27.78% return over the past week, currently trading at $61.36, close to the acquisition price.

Skechers USA disclosed on Tuesday that it had agreed to be acquired by 3G Capital for a purchase price of $63 per share in cash, which translates to an approximate $9 billion enterprise value. This acquisition is anticipated to be finalized in the third quarter of 2025. According to InvestingPro data, Skechers maintains a strong financial position with a current ratio of 2.13, indicating healthy liquidity as it approaches this transaction.

Morgan Stanley’s analysts have aligned their new price target with the offer price, indicating a neutral position as the acquisition process unfolds. The firm’s updated bull case for Skechers is now set at $72, which is closely in line with their previous base case of $73. Their bear case remains unchanged at $42.

The acquisition by 3G Capital is a significant move for Skechers, a leader in the footwear industry, and the adjusted stock rating and price target from Morgan Stanley reflect a shift to a more cautious outlook as the transaction progresses towards completion.

Investors and market watchers will be keeping a close eye on the developments of this acquisition, which is poised to be one of the notable transactions in the footwear industry in 2025. Skechers and 3G Capital are preparing for the next stages of the deal, which is expected to have a considerable impact on the company’s future. For a comprehensive analysis of Skechers’ financial health and detailed valuation metrics, investors can access the full Pro Research Report available on InvestingPro, which covers over 1,400 US stocks with expert insights and actionable intelligence.

In other recent news, Skechers USA Inc . reported its first-quarter earnings for 2025, showcasing a steady financial performance. The company announced earnings per share of $1.17, which met market expectations, but revenue slightly missed forecasts, coming in at $2.41 billion against an anticipated $2.43 billion. Despite this minor revenue miss, Skechers’ revenue increased by 7.1% compared to the previous year. The company expanded its global footprint by opening 51 new stores, with international sales accounting for 65% of total revenue. Skechers expressed cautious optimism about future growth, with plans to open 150-170 company-owned stores in 2025. The company remains focused on expanding its market presence, particularly through international sales. However, Skechers did not provide specific guidance due to macroeconomic uncertainties. The company’s management discussed strategies to mitigate potential tariff impacts and supply chain disruptions, emphasizing cost-sharing with vendors and sourcing optimization.

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