Market Overview

Analyst: For Wolverine World Wide, The 'Heavy Lifting' Is Done

Share:
Analyst: For Wolverine World Wide, The 'Heavy Lifting' Is Done
Related WWW
Earnings Scheduled For August 8, 2018
Wolverine World Wide's Q2 Earnings Preview

After a multiyear restructuring effort by Wolverine World Wide, Inc. (NYSE: WWW) the  "heavy lifting" is now complete and a D.A. Davidson analyst said he's taking a bullish stance. 

The Analyst

D.A. Davidson's Andrew Burns upgraded Wolverine World Wide's stock from Hold to Overweight with a price target boosted from $33 to $36.

The Thesis

Over the past two years, Wolverine World Wide divested poor-performing brands, completely exited unprofitable segments, streamlined its supply chain and brought in new executives to the management team, Burns said in a Thursday note.

Throughout the transition, the footwear and apparel name posted revenue declines and large one-time charges, but Wolverine is now "the best positioned it has been in years" and is even situated to pursue acquisitions, Burns said. 

Wolverine is expected to deliver a sustainable organic growth rate and a 12-percent-plus operating margin given its lean inventories, investments in brands, good order visibility and an improved retail backdrop, the analyst said. During the company's fourth-quarter report Wednesday, management guided full year 2018 EPS to be $1.95 to $2.05 and revenue to be $2.24 to $2.32 billion.

The high ends of both metrics are "plausible" given a "healthy brand momentum," Burns said. 

The prospect of 25-percent EPS growth in fiscal 2018 coupled with improved organic growth now justifies a bullish stance on the stock, the analyst said. 

Price Action

Shares of Wolverine World Wide were trading higher by 4.30 percent at $30.78 Thursday afternoon. 

Related Links:

Despite The Noise, Athletic Trends Can Return To Growth

Doubts About Wolverine World Wide's Top-Line Appear To Be Lifting, Analyst Upgrades

 

Photo from Wikimedia. 

Latest Ratings for WWW

DateFirmActionFromTo
Aug 2018CitigroupMaintainsNeutralNeutral
Aug 2018ArgusMaintainsBuyBuy
Aug 2018BuckinghamMaintainsNeutralNeutral

View More Analyst Ratings for WWW
View the Latest Analyst Ratings

Posted-In: Andrew Burns Apparel DA Davidson FootwearAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga

 

Related Articles (WWW)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
AAPLWedbushInitiates Coverage On310.0
DHTJP MorganUpgrades0.0
DISBarclaysUpgrades130.0
DXCMGoldman SachsUpgrades125.0
ORLYJP MorganUpgrades398.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

JELD-WEN Is A 'Second Half Story,' Wells Fargo Says In Downgrade Note

The Long-Term Performance Of This WisdomTree Mid-Cap ETF Is Hard To Ignore