Piper Sandler maintains Neutral on Deckers Outdoor, target at $210

Published 24/01/2025, 11:58 pm
DECK
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However, Deckers Outdoor (NYSE:DECK) is also continuing to invest in its business, with expectations of a 22% increase in selling, general, and administrative expenses (SG&A). While the company's momentum has been acknowledged, Piper Sandler remains Neutral on the stock, attributing this stance to the high market expectations and the company's current P/E ratio of 38.1x. Investors are reportedly expecting earnings per share to be around $3.As Deckers Outdoor approaches its earnings report next week, the market will be watching to see if the company can indeed deliver the anticipated sales and margin beat, and how this performance aligns with investor expectations and the company's ongoing investments. For deeper insights into DECK's valuation and growth prospects, including exclusive financial health scores and detailed analysis, visit InvestingPro, where you'll find comprehensive research reports and real-time metrics.

The analyst's checks suggest that Deckers Outdoor's brand HOKA has successfully managed inventory for its Bondi 8 model, which is no longer discounted on its own site and has limited colors and sizes available at partner retailers. The Bondi 9 was launched last week. Meanwhile, the UGG brand has maintained an average discount of around 30% online and with partners, a rate that is consistent with previous quarters and considered mild for the holiday season. This could indicate potential upside to the company's gross margins, which have already contributed to the stock's impressive 74.71% return over the past year.

However, Deckers Outdoor is also continuing to invest in its business, with expectations of a 22% increase in selling, general, and administrative expenses (SG&A). While the company's momentum has been acknowledged, Piper Sandler remains Neutral on the stock, attributing this stance to the high market expectations and the company's current valuation. Investors are reportedly expecting earnings per share to be around $3.

As Deckers Outdoor approaches its earnings report next week, the market will be watching to see if the company can indeed deliver the anticipated sales and margin beat, and how this performance aligns with investor expectations and the company's ongoing investments.

In other recent news, Deckers Outdoor Corporation has been a focus of multiple analyst revisions due to the company's strong performance, particularly in its HOKA and UGG brands. KeyBanc Capital Markets raised its price target for Deckers Outdoor to $230, citing the company's growth potential. Similarly, Citi analyst Paul Lejuez increased the price target to $215 due to robust sales performance from the HOKA and UGG brands. Truist Securities also lifted the price target to $235, reflecting strong demand for the UGG and HOKA brands. Needham analysts echoed this positive sentiment, raising their price target on Deckers shares to $246.

UBS reiterated a Buy rating on Deckers, forecasting a 21% five-year compound annual growth rate in sales for the HOKA brand. Baird maintained an Outperform rating on Deckers, emphasizing the company's sustainable growth. Deckers Outdoor's strong earnings and revenue growth, along with positive analyst projections, underscore these recent developments.

The company's HOKA and UGG brands are driving revenue growth, with HOKA's focus on product development and UGG's efforts to diversify its product offerings contributing to the positive outlook. Deckers is also updating two of its most popular HOKA shoe franchises, the Bondi and Clifton, which are anticipated to boost the company's performance.

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