Stifel maintains Buy on Skechers stock with $80 price target

On Monday, Stifel analysts reiterated their Buy rating on Skechers USA (NYSE:SKX) with an unchanged price target of $80.00, well within the current analyst range of $65-94. The firm’s positive stance comes after meetings with John Vandemore, Skechers’ Chief Financial Officer. These discussions offered insights into the brand’s strategic positioning, its investments in expanding distribution capacity, and the key factors that are expected to drive future growth. InvestingPro data shows the company maintains a strong financial health score, with robust liquidity and moderate debt levels.

Stifel’s analysis underlines Skechers’ potential in the performance footwear segment, where the brand’s emphasis on comfort and value for money is seen as a significant advantage. The firm believes that these attributes are well-suited to capture a larger market share, especially in international markets where growth opportunities are abundant. This optimism appears well-founded, as the company has demonstrated solid revenue growth of 12.11% over the last twelve months.

The current valuation of Skechers stock at 14.2 times price-to-earnings (P/E) based on current earnings, with a PEG ratio of 0.72, suggests the stock may be undervalued relative to its growth potential. According to InvestingPro analysis, which considers multiple valuation metrics and growth factors, the stock appears to be trading below its Fair Value, potentially not fully appreciating the company’s consistent growth track record, its prospects for future expansion, and its potential for long-term margin improvement.

Skechers’ financial performance and strategic initiatives appear to resonate with Stifel’s positive outlook. The firm’s analysis suggests that the market may be undervaluing the company’s capacity to sustain growth and achieve higher profit margins over time.

Investors and market watchers will likely continue to monitor Skechers’ progress in expanding its global footprint and capturing market share in the competitive athletic footwear industry, as well as the company’s ability to meet the performance expectations set forth by analysts.

In other recent news, Skechers USA reported its fourth-quarter 2024 earnings, which revealed a shortfall in both earnings per share (EPS) and revenue expectations. The company posted an EPS of $0.65, missing the forecasted $0.74, while revenue came in at $2.21 billion, slightly below the anticipated $2.22 billion. Despite these quarterly results, Skechers achieved a 13% increase in full-year sales to $9.04 billion, with a 26% rise in annual EPS to $4.40. Looking ahead, Skechers projects sales between $9.7 billion and $9.8 billion for 2025, with an expected EPS range of $4.30 to $4.50.

Barclays (LON:BARC) recently revised its price target for Skechers, lowering it to $77 from $80, while maintaining an Overweight rating. This adjustment reflects anticipated challenges, such as decreased sales forecasts and increased costs. UBS also adjusted its price target for Skechers from $92 to $90, maintaining a Buy rating, citing the company’s global reach and product appeal despite foreign exchange headwinds. UBS analysts expressed confidence that Skechers’ sales and earnings margins would surpass market expectations. These developments highlight the mixed sentiment among analysts regarding Skechers’ future performance amidst current financial challenges.

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