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

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

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. 

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


Photo from Wikimedia. 

Latest Ratings for WWW

Dec 2020KeyBancMaintainsOverweight
Oct 2020KeyBancMaintainsOverweight
Oct 2020WedbushMaintainsOutperform

View More Analyst Ratings for WWW
View the Latest Analyst Ratings


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