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Wolverine Upgrade: KeyBanc Sees Too Much Focus On Sperry Decline

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Wolverine World Wide (NYSE: WWW) edged up Tuesday after one 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 year to date. "The Street has lost perspective on the company's broader investment framework," KeyBanc's Ed Yruma said in a research note.

Yruma upgraded Wolverine 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.

Yruma 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," Yruma 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.

Latest Ratings for WWW

DateFirmActionFromTo
Nov 2014DA DavidsonUpgradesNeutralBuy
Nov 2014DA DavidsonMaintainsNeutral
Oct 2014MacquarieMaintainsNeutral

View More Analyst Ratings for WWW
View the Latest Analyst Ratings

Posted-In: Ed Yrma KeyBancAnalyst Color Upgrades Price Target Analyst Ratings

 

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