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On Thursday, UBS analysts reaffirmed their Buy rating and maintained a $169.00 price target on Deckers Outdoor stock (NYSE: NYSE:DECK). The analysts anticipate that Deckers’ earnings per share (EPS) will exceed market expectations over the next twelve months as sales growth for the Hoka brand accelerates. They also expect the UGG brand to continue its strong performance as a leading casual footwear choice globally. According to InvestingPro data, Deckers boasts a perfect Piotroski Score of 9, indicating exceptional financial strength, with a healthy current ratio of 3.72 and more cash than debt on its balance sheet.
The analysts expressed confidence in Deckers’ ability to achieve a low double-digit percentage compound annual growth rate (CAGR) in sales. They predict that this growth could push Deckers’ forward price-to-earnings (P/E) ratio above 20 times, compared to the current 16.7 times. The price target set by UBS suggests a potential 60% upside for the stock. The stock has seen a significant 47% decline over the past six months, potentially presenting an opportunity. InvestingPro analysis suggests the stock is currently undervalued, with 12 additional exclusive insights available to subscribers.
Meetings with Deckers management on Wednesday further solidified the analysts’ positive outlook on the company’s growth potential. Despite market skepticism regarding the Hoka brand’s ability to maintain strong growth, UBS analysts believe that Deckers is effectively addressing concerns related to competition, fashion trends, and product dependency.
The market has raised questions about Hoka’s competitive edge, the potential shift in fashion trends away from its "max cushioning" style, and reliance on its Clifton and Bondi franchises. UBS analysts are confident that Deckers is taking appropriate steps to mitigate these issues and sustain double-digit revenue growth for Hoka in the coming years.
In other recent news, Deckers Outdoor Corporation’s fourth-quarter fiscal year 2025 performance has been a focal point for analysts. The company exceeded expectations in several areas, notably with UGG brand revenues surpassing estimates by $60 million and a gross margin outperforming by 370 basis points. However, HOKA brand sales fell short of consensus revenue estimates by $23 million, marking a slowdown in its direct-to-consumer sales. Analysts from firms like Stifel, BofA Securities, and Truist Securities have adjusted their price targets for Deckers, reflecting varying degrees of caution and optimism. Stifel maintained a Hold rating with a target of $127, while BofA Securities reduced the target to $128, maintaining a Neutral rating. Truist Securities, on the other hand, significantly lowered its target to $130 but retained a Buy rating, highlighting management’s conservative approach to guidance amid macroeconomic uncertainties. Williams Trading also reduced its target to $129, citing weaker-than-expected HOKA sales and a lack of fiscal year 2026 guidance. Meanwhile, TD Cowen adjusted its price target to $157, maintaining a Buy rating and pointing to Deckers’ substantial share repurchase program as a positive indicator. These developments underscore the mixed sentiment among analysts regarding Deckers’ growth prospects and strategic direction.
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