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On Wednesday, Stifel analysts revised their price target for Wolverine World Wide (NYSE:WWW) shares, lowering it to $27.00 from the previous $29.00, while still holding a Buy rating for the company. According to InvestingPro data, the stock currently trades at $15.49, with analyst targets ranging from $21 to $30, suggesting significant upside potential. InvestingPro analysis indicates the stock is currently trading near its Fair Value. The adjustment follows Wolverine’s fourth-quarter performance and the release of its fiscal year 2025 outlook, which fell short of market expectations due to foreign exchange headwinds and a reduced forecast for top-line growth.
Despite these challenges, Stifel highlighted several positive aspects of Wolverine’s business. The firm noted that indicators of the company’s fundamental health remain encouraging. This includes growth in its Merrell brand, which saw a positive turn in the third quarter of fiscal year 2024, and continued strength in the Saucony brand, bolstered by its performance in both the running and lifestyle segments. The company maintains a respectable gross profit margin of 42.35% and has maintained dividend payments for 38 consecutive years, demonstrating long-term financial stability.
Stifel also praised Wolverine’s strong balance sheet management, pointing out a significant 36% year-over-year reduction in inventories and a free cash flow of $160 million in fiscal year 2024. Additionally, the company’s net leverage has improved, now standing at 2.8 times.
The analysts expressed confidence in Wolverine’s conservative guidance for 2025, suggesting it may provide room for upward revisions as the year progresses. They anticipate Saucony could be a potential source of positive surprises, driven by gains in performance share and increased lifestyle market penetration. The commentary from Wolverine suggests that any top-line growth beyond the guidance could lead to improved profitability.
Although Stifel has reduced its earnings per share (EPS) estimates for Wolverine by about 11% for both fiscal years 2025 and 2026, the firm remains optimistic. Their EPS projection for fiscal year 2025 stands at $1.23, slightly above the company’s guidance range of $1.05 to $1.20. The analysts concluded by reiterating their Buy rating, indicating a belief that the company’s shares are positioned for potential over-delivery on financial expectations. InvestingPro subscribers have access to 12 additional key insights about WWW, including detailed valuation metrics and comprehensive financial health scores, helping investors make more informed decisions about this volatile stock.
In other recent news, Wolverine Worldwide Inc. reported its fourth-quarter 2024 earnings, with earnings per share (EPS) aligning with analyst expectations at $0.42. The company slightly surpassed revenue forecasts, reporting $495 million against the anticipated $492.12 million. Despite these figures, the market reacted with caution, reflecting concerns over Wolverine Worldwide’s future growth prospects. The company has projected a revenue growth of 2.5-4.3% for 2025, targeting between $1.795 billion and $1.825 billion. Analysts from Piper Sandler and DNP Paribas Asset Management have shown interest in the company’s growth strategies, particularly in brands like Saucony and Merrell, which are expected to drive significant growth. Wolverine Worldwide has been focusing on innovation and new product launches to bolster its market position. The company also reported a reduction in net debt by 33% to $496 million, highlighting efforts to improve financial stability.
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