Wolverine Upgrade: Analyst Sees Too Much Focus On Sperry Decline

Wolverine World Wide Inc.

edged up Tuesday after an analyst said investors are overly focused on the declining popularity of its Sperry brand boat shoe. Shares of the shoemaker are down more than 25 percent in the year to date. "The Street has lost perspective on the company's broader investment framework," Keybanc's Ed Yrma said in a research note. Yuma upgraded Woverine to Buy from Hold and set a target of $30. Wolverine brands include Hush Puppies and Merrell. In 2012 it paid $1.23 billion to acquire Performance Lifestyle Group, adding Sperry, Keds, Saucony and others. Wolverine is gradually lowering its debt from the acquisition and realizing related benefits. Yrma noted that Wolverine "legacy" brands see 30 percent of sales internationally versus 10 percent from the PLG brands. "The key to their margin expansion in coming years is the migration of the PLG brands to the Wolverine legacy platform," Yrma said. The analyst expects 2018 earnings of more than $5 a share, compared with the company's forecast for 2014 of $1.57 to $1.63 a share. Wolverine traded recently at $25.26, up 2.3 percent.