Jay Sole of Morgan Stanley on Monday downgraded shares of Deckers Outdoor Corp DECK to Equal-weight with an $82 price target, as the stock lacks the necessary drivers needed to warrant an Overweight rating.
"Deckers Outdoor has fallen 11 percent since its 3Q report, but we don't see a major rebound occurring," Sole wrote. "We don't see significant earnings per share revision potential or a catalyst which may stimulate a re-rating until next Holiday."
Sole also notes that the UGG brand equity is "eroding" as Google search and comScore data imply third-quarter results were due to an emerging brand equity erosion and not due to weather comparisons and other one-time factors. The analyst also adds that a more diversified product line isn't attracting enough customers and that international growth may not be as large as previously assumed.
Bottom line, Sole is lowering his five-year earnings per share compounded annual growth rate forecast to 10 percent from 15 percent given a more mature phase of its growth.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.