Piper Jaffray Reiterates Overweight Rating, $68 PT on Deckers Outdoor Corp. on Long-Term Confidence

In a report published Wednesday, Piper Jaffray analyst Erinn E. Murphy reiterated an Overweight rating and $68.00 price target on Deckers Outdoor Corp. DECK. In the report, Piper Jaffray noted, “DECK is our top margin recovery idea which we believe is benefiting from stabilizing demand of the UGG brand in addition to an opportunity for meaningful reduce COGS with alleviating pressure from sheepskin costing. As a means to monitor stabilizing demand, we have initiated the use of proprietary web analytics which has shown a 0.81 historic correlation between UGG same-store sales and brand-related search traffic. We are encouraged by the 39% sequential increase in search trends since Q2. The bottom line is that Q3-to-date trends are tracking ahead of last year and should trends continue, we believe there is 200 bps in upside to our comp estimate. As it relates to the stock, we remain confident in our margin recovery thesis long term, and view the Q3 report as a key catalyst from a visibility perspective on FY14's sheepskin costs.” Deckers Outdoor Corp. closed on Tuesday at $56.99.