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On Monday, Baird analysts upgraded Wolverine World Wide shares, listed on the New York Stock Exchange (NYSE:WWW), from Neutral to Outperform, setting a new price target of $15.00. The upgrade reflects a positive outlook on the company’s risk/reward balance in light of recent market developments. According to InvestingPro data, analysts maintain a consensus "Buy" recommendation, with price targets ranging from $15 to $25, suggesting significant upside potential.
Wolverine World Wide, known for its footwear and apparel, has seen its shares fall by 55% from their peak, currently trading at $10.79. InvestingPro analysis indicates the stock is currently undervalued, with a strong free cash flow yield of 18%. Despite this decline, Baird analysts note that the company’s limited sourcing from China, which is described as a mid-teens percentage of their global mix and is mostly dual-sourced, may shield it from significant risk. The analysts also highlight conservative estimates embedded in the company’s 2025 projections, particularly regarding the growth of the Saucony brand and consolidated gross margins, which currently stand at 44.5%.
Saucony, which comprises 25% of Wolverine’s revenue, is expected to grow in the low-double-digits. Baird analysts believe this target is achievable, if not surpassable, given the brand’s current performance and momentum in both performance footwear and lifestyle categories. The optimism surrounding Saucony’s resurgence adds a layer of confidence to Wolverine’s financial outlook, supported by the company’s solid financial health score of "FAIR" from InvestingPro’s comprehensive analysis.
The analysts also suggest that potential tariffs may pose only a limited risk to the company’s earnings per share (EPS). With the assumption of minimal tariff pressure extending into 2026 and an enterprise value to EBITDA (EV/EBITDA) multiple exceeding 10 times, Baird posits that Wolverine’s stock could potentially climb to over $20 per share in an optimistic scenario.
Wolverine World Wide’s strategic positioning and the resilience of its key brand, Saucony, have led Baird to adopt a more favorable view of the company’s stock, signaling potential upside for investors amidst the current market conditions.
In other recent news, Wolverine World Wide reported a 3% year-over-year revenue increase for ongoing businesses in the fourth quarter of 2024, with notable performances from its Merrell and Saucony brands. The company achieved a significant reduction in leverage, decreasing from 9.2x at the end of 2023 to 5.3x at the end of 2024, and reduced its total debt by approximately $270 million. Stifel analysts maintained their Buy rating and $27 price target, expressing confidence in Wolverine’s strategic vision and potential for growth, particularly in the Merrell and Saucony brands. Meanwhile, UBS adjusted the price target to $26 from $29 but retained a Buy rating, citing short-term challenges but projecting a 19% compound annual growth rate in earnings per share over the next five years. Telsey Advisory Group, however, lowered its price target from $23 to $17, maintaining a Market Perform rating, noting Wolverine’s uneven brand performance and the need for further development. The company also announced a strategic shift in its international management, eliminating the position of President of the International Group as part of its effort to align operations more closely with brand strategies. S&P Global Ratings revised Wolverine’s outlook to stable, affirming its credit ratings due to improved operating performance and expected modest growth in 2025. These developments highlight Wolverine World Wide’s ongoing transformation and efforts to strengthen its financial health and brand performance.
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