Deckers Outdoor Holds Steady: A Balanced Outlook Amidst Growth and Market Challenges

In a report released today, Paul Lejuez from Citi maintained a Hold rating on Deckers Outdoor (DECK – Research Report), with a price target of $920.00.

Paul Lejuez has given his Hold rating due to a combination of factors that indicate a balanced risk/reward scenario for Deckers Outdoor’s stock. The company is expected to surpass consensus estimates in its fourth-quarter sales and earnings per share, largely driven by a robust performance from its UGG brand. However, despite this anticipated outperformance, there is caution regarding future growth prospects. The guidance for fiscal year 2025 is projected to be conservative, falling below consensus expectations, which reflects management’s cautious stance amidst challenging comparisons and the need for the UGG brand to maintain a mid-single-digit growth and Hoka to continue growing at over 20%.
Additionally, the report suggests that while Deckers Outdoor’s business fundamentals are currently strong, the stock’s near-term upside may be limited due to the high expectations already set in the market. The analyst acknowledges the tough comparisons for the UGG brand and the high visibility during its third quarter, which could make continued growth at the same rate challenging. Furthermore, Citi credit card data indicates a slowdown in spending at shoe stores and athletic/active segments, which could imply headwinds for Deckers Outdoor’s UGG and Hoka brands respectively. Given these factors, Levjuez sees the stock’s current price as reflecting a fair value, prompting the Hold recommendation.

Lejuez covers the Consumer Cyclical sector, focusing on stocks such as Macy’s, Abercrombie Fitch, and Foot Locker. According to TipRanks, Lejuez has an average return of 8.8% and a 57.60% success rate on recommended stocks.

In another report released on May 6, Stifel Nicolaus also maintained a Hold rating on the stock with a $775.00 price target.

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Deckers Outdoor (DECK) Company Description:

Deckers Outdoor Corp. engages in the business of designing, marketing, and distributing footwear, apparel, and accessories developed for both everyday casual lifestyle use and high performance activities. It operates through the following segments: UGG Brand, HOKA Brand, Teva Brand, Sanuk Brand, Other Brands, and Direct-to-Consumer. The UGG Brand segment offers a line of premium footwear, apparel, and accessories. The HOKA Brand segment sells footwear and apparel that offers enhanced cushioning and inherent stability with minimal weight, originally designed for ultra-runners. The Teva Brand segment focuses on the sport sandal and modern outdoor lifestyle category, such as sandals, shoes, and boots. The Sanuk Brand segment originated in Southern California surf culture and has emerged into a lifestyle brand with a presence in the relaxed casual shoe and sandal categories. The Other Brands segment includes the Koolaburra by UGG brand. The Direct-to-Consumer segment comprises of retail stores and e-commerce websites. The company was founded by Douglas B. Otto in 1973 and is headquartered in Goleta, CA.