NEW YORK (TheStreet) -- Shares of Deckers Outdoor are climbing after Goldman Sachs upgraded the stock to Buy from Neutral, as the firm expects the company to have a "very good year." WHAT'S NEW: After Deckers reported weaker than expected results and lower than expected sales of its UGG boots, Goldman analyst Taposh Bari still believes that the company's fiscal 2016 results should be boosted by a number of drivers. Among the positive catalysts identified by the analyst are share repurchases, expected to be carried out for the first time in years, and increased sales of UGGs made from the material called UGGpure, which should boost the company's margins, according to the analyst. Also likely to help Deckers are improved sales of its HOKA running shoes, Bari predicted. Before the stock tumbled on Friday in response to its results, Bari had been neutral on the shares, based on risks facing the company, including concentrated seasonality and weather sensitivity. However, following the stock's decline, the analyst believes that there is a significant margin of safety for investors. Although some investors fear that the shares could be headed for a repeat of their 2012 performance when they tumbled 47%, Bari says that fear is unfounded. The company's sheepskin costs won't jump 40% as they did in 2012. Also, unlike in 2012, its UGG inventories are aligned with its sales growth, contended the analyst, who kept a $90 price target on the shares. PRICE ACTION: In early trading, Deckers jumped 2.7% to $67.84. Reporting by Larry Ramer.
Click to view a price quote on DECK. Click to research the Consumer Non-Durables industry.
from Latest TSC Headlines http://ift.tt/1uR0GFe
No comments:
Post a Comment