Steven Madden stock rating raised to Hold at Williams Trading

On Tuesday, Williams Trading analyst Sam Poser upgraded Steven Madden stock (NASDAQ:SHOO) from Sell to Hold and significantly increased the price target to $31.00, a substantial rise from the previous target of $16.00. The stock has already shown strong momentum, posting a remarkable 31.2% return in the past week. According to InvestingPro analysis, the company appears undervalued at its current price of $26.41, suggesting potential upside aligned with analyst targets. Poser’s decision follows the recent government announcement to halt the additional 145% tariffs on Chinese goods for the next 90 days. The current tariffs will maintain an additional 10% and a 20% tariff, particularly around the regulation of Fentanyl. This development is particularly significant for Steven Madden, which maintains a healthy financial position with a current ratio of 2.25 and operates with a moderate debt-to-equity ratio of 0.19.

The suspension of heightened tariffs on imports from China is expected to alleviate some of the financial strains on Steven Madden, especially impacting its Madden Girl, Betsey Johnson, apparel, and Kurt Geiger lines. While the core Steve Madden women’s brand and Dolce Vita have largely shifted their production to countries like Mexico, Brazil, Vietnam, and Cambodia, approximately 58% of the company’s inventory destined for the U.S. market in spring 2025 was sourced from China. The company’s robust annual revenue of $2.28 billion and strong gross profit margin of 41.1% demonstrate its operational efficiency despite these challenges. For deeper insights into Steven Madden’s financial health and detailed analysis, consider exploring the comprehensive Pro Research Report available on InvestingPro.

With the new tariff arrangements, the proportion of Steven Madden’s U.S. orders sourced from China is projected to decrease to the mid-teens by fall 2025. This figure is anticipated to further decline to mid-single digits (MSD) by spring 2026. The adjustment in tariffs and the subsequent sourcing strategy changes are expected to influence the company’s operational costs and margins positively.

The updated price target and stock rating reflect a more optimistic outlook for Steven Madden’s financial performance in the face of changing trade policies. The company’s proactive measures in diversifying its production footprint appear to be mitigating potential tariff impacts, positioning it for a more stable future amid international trade uncertainties.

In other recent news, Steven Madden Limited reported its first-quarter 2025 earnings, revealing a mixed financial performance. The company exceeded earnings per share (EPS) expectations with an EPS of $0.60, significantly surpassing the forecasted $0.46. However, consolidated revenue reached $553.5 million, slightly below the expected $556.3 million. Steven Madden’s strategic move to reduce its U.S. imports from China to a mid-teens percentage by the end of the year was a notable development, aiming to mitigate potential sales losses due to order cancellations from China. The acquisition of Kurt Geiger is expected to support international expansion, with the brand contributing to Steven Madden’s growth strategy. Citi analyst Paul Lejuez raised the stock price target to $26 from $23, maintaining a Neutral rating, following the company’s better-than-expected first-quarter results. Despite these positive developments, challenges remain, including potential retail order cancellations and margin pressures due to production shifts to Vietnam and Cambodia. Steven Madden has also withdrawn its previous 2025 financial guidance, citing uncertainties related to new U.S. tariffs.

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