On Tuesday, Truist Securities revised its price target for Deckers Outdoor (NYSE:DECK), a footwear and apparel company, from $205.00 to $230.00, while reaffirming its Buy rating on the stock. The company's stock has demonstrated remarkable performance, with an 81% year-to-date return according to InvestingPro data. The adjustment comes as Deckers Outdoor's HOKA brand continues to perform well in major retail outlets.
According to Truist Securities, HOKA has been a leading brand at both Dick's Sporting Goods (NYSE:DKS) and Fleet Feet. The brand's strong sellout trends have been attributed to strategic clearing of the wholesale channel in anticipation of upcoming upgrades to the Bondi and Clifton shoe lines, expected to be introduced in early 2025. This move is part of Deckers Outdoor's broader efforts to expand brand awareness, supported by robust revenue growth of 19% in the last twelve months.
The analyst's review also highlighted that UGG, another key franchise of Deckers Outdoor, is experiencing rapid sellouts during the holiday season. This trend underscores the sustained popularity of the UGG brand.
The new price target reflects a positive outlook for Deckers Outdoor's growth opportunities in the coming year. The company's effective management of inventory and marketing initiatives are seen as drivers for continued success and expansion in the market.
Truist Securities' updated valuation of Deckers Outdoor at $230.00 per share marks a notable increase in confidence in the company's growth prospects, particularly as it prepares to launch significant updates to its product lines and continues to capitalize on the strong performance of its established brands.
In other recent news, Deckers Outdoor Corporation has been in the spotlight due to its robust financial performance. The company reported a significant increase in quarterly sales, driven largely by its two flagship brands, UGG and HOKA, with HOKA achieving record-breaking revenue. Deckers also exceeded forecasts in gross margin, benefiting from an emphasis on higher-margin sales within its UGG and HOKA brands. As a result of these impressive results, the company revised its full-year outlook upwards.
The strong performance led firms such as Telsey Advisory Group, TD Cowen, and Needham to raise their price targets for Deckers. Needham, in particular, initiated coverage on Deckers with a Buy rating and a price target of $218.00, citing the company's strong performance history and its effective management team. However, Citi maintained a more cautious stance due to valuation concerns.
Analysts from TD Cowen, Evercore ISI, and others have shown confidence in Deckers' performance, raising their price targets and maintaining positive ratings. These recent developments suggest a promising future for Deckers, with significant growth expected in the coming years. Despite the positive trends, Citi's stance is tempered by valuation concerns, highlighting the potential for limited multiple expansion due to expected increase in competition for the Hoka brand over the coming 12 months.
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