Is this U.S.-China selloff a buy? A top Wall Street voice weighs in
Investing.com - UBS has reiterated its Neutral rating and $85.00 price target on Crocs (NASDAQ:CROX) as the footwear company faces continued pressure in its North American market. According to InvestingPro data, the company maintains impressive gross profit margins of 59.4% and strong free cash flow yield, though 12 analysts have recently revised their earnings expectations downward.
The stock has declined 29.2% year-to-date, significantly underperforming compared to the S&P 500’s 12.5% gain during the same period, with the company’s last earnings report serving as a negative catalyst for the share price.
UBS conducted a call with a former Crocs director who has extensive knowledge of the brand’s business to address concerns about whether the Crocs brand can return to sustainable mid-single-digit sales growth in North America.
Based on expert commentary and their analysis, UBS expects the Crocs brand’s North America sales growth to remain under pressure, noting the company needs to diversify its product assortment and enhance its brand strategy.
Despite these challenges, UBS maintains that Crocs’ current valuation of approximately 7 times FY2 price-to-earnings ratio likely already reflects this bearish outlook, supporting their decision to maintain a Neutral stance on the stock.
In other recent news, Crocs has been the subject of several analyst revisions following its latest financial disclosures. The company reported second-quarter 2025 earnings that exceeded estimates, yet issued guidance that fell short of consensus expectations. This has led to a variety of stock price target adjustments by analyst firms. KeyBanc Capital Markets lowered its price target to $95, citing concerns over the outlook despite describing the earnings report as "decent." BofA Securities also reduced its price target to $99 due to disappointing third-quarter guidance but maintained a Buy rating, suggesting potential for future improvements.
Additionally, Needham raised its price target for Crocs to $100 while keeping a Buy rating, even as the company announced the resignation of CFO Susan Healy. Williams Trading downgraded Crocs from Buy to Hold, cutting its price target to $80, driven by a weak consumer outlook. Barclays also downgraded Crocs, reducing its price target to $81 amid macroeconomic uncertainties and challenges with its HEYDUDE brand. These developments highlight the varied analyst perspectives on Crocs’ future performance.
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