On Tuesday, Skechers USA Inc . (NYSE:SKX) stock received an upgrade from Morgan Stanley from Equalweight to Overweight, with a new price target set at $80.00. The upgrade reflects a potential upside of approximately 26% from the current share price.
The firm based its decision on several key factors, including positive results from proprietary research, which includes a 2024 global sportswear survey and channel checks. Additionally, Morgan Stanley expressed continued confidence in the likelihood of positive earnings per share (EPS) revisions over the next twelve months (NTM).
Morgan Stanley highlighted the potential for Skechers' valuation to experience a re-rating. This outlook is supported by the company's higher profitability profile and improved positioning in the marketplace, which the firm believes have not yet been fully recognized by investors.
The price target adjustment to $80.00 is a significant shift that suggests Morgan Stanley sees substantial growth potential for Skechers. This move indicates a positive outlook for the company's financial performance and stock valuation in the near future.
Investors and market watchers may see this upgrade as a sign of Skechers' solid standing in the sportswear industry and its ability to outperform market expectations. The endorsement from a major financial institution like Morgan Stanley could influence market sentiment and trading in the company's shares.
In other recent news, Under Armour (NYSE:UA) has been receiving attention from various financial institutions. Morgan Stanley downgraded Under Armour from Equalweight to Underweight, citing concerns from their proprietary research and the risk of negative earnings per share revisions.
Simultaneously, Williams Trading revised its price target for Under Armour, reducing it to $6.00 from the previous $8.00, maintaining a Hold rating on the stock. These decisions follow Under Armour's recent announcement of a $434 million settlement for a shareholder class action lawsuit from 2017. The company plans to use its available cash and $1.1 billion revolving credit facility to fund the settlement.
Despite these challenges, Under Armour is pushing forward with a restructuring plan aimed at repositioning the brand within the U.S. market. These recent developments are part of the ongoing narrative for Under Armour as it navigates the competitive sportswear market.
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