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Crocs Stock: Buy Rating Affirmed Amid Strong Margin Defensibility and International Growth Prospects

Crocs Stock: Buy Rating Affirmed Amid Strong Margin Defensibility and International Growth Prospects

Crocs (CROXResearch Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Christopher Nardone from Bank of America Securities reiterated a Buy rating on the stock and has a $135.00 price target.

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Christopher Nardone has given his Buy rating due to a combination of factors that highlight the potential for Crocs’ stock to appreciate. The stock is currently trading at a relatively low price-to-earnings ratio of 7.5x, which Nardone considers inexpensive given the company’s expected low to mid-single-digit percentage sales growth and operating margins of 22.5-23% over the next two to three years. Despite a recent decline in share price, Nardone believes the stock has already accounted for a cautious U.S. wholesale environment, making the risk/reward profile attractive.
Moreover, Nardone anticipates that Crocs can achieve an earnings per share (EPS) of $13, supported by the company’s strong margin defensibility. While there are challenges such as tariffs and a softer wholesale backdrop, positive factors like favorable foreign exchange rates, cost-saving measures, and a healthy direct-to-consumer growth outlook contribute to this optimism. The international growth, which constitutes a significant portion of Crocs’ sales, further bolsters the company’s prospects, justifying the Buy rating.

Nardone covers the Consumer Cyclical sector, focusing on stocks such as Levi Strauss & Co, American Eagle, and Carter’s. According to TipRanks, Nardone has an average return of 15.7% and a 57.65% success rate on recommended stocks.

In another report released on June 12, Williams Trading also maintained a Buy rating on the stock with a $135.00 price target.

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