UPDATE: Wedbush Downgrades Steven Madden Ltd. to Neutral, Reiterates $55 PT on Valuation

In a report published Tuesday, Wedbush analyst Corinna Freedman downgraded the rating on Steven Madden Ltd. SHOO from Outperform to Neutral, but reiterated the $55.00 price target. In the report, Wedbush noted, “We are downgrading shares of SHOO to NEUTRAL on valuation. We believe that shares will be range-bound as 1) uncertainty remains around the conservatism of department store orders, 2) the competitive environment intensifies given lack of newness or any new key items (in our view) causing concern for 2H same-store sales trends as promos could increase, 3) we anticipate a plateauing of footwear purchases (relative to the previous years) given tough comparisons, the return to a more neutral color palate, with purchases perhaps focused instead on several key investment pieces versus color/unit-driven purchases and potential mix shift towards apparel; given heightened promotions in the category, 4) M&A activity may be unlikely for the company this fiscal year, and 5) while we applaud the use of cash for increased share buybacks, we believe that investors are less likely to give credit for shareholder-friendly capital allocation if sales trends are in question.” Steven Madden Ltd. closed on Monday at $53.65.