Bank of America Securities analyst Christopher Nardone reiterated a Hold rating on Deckers Outdoor today and set a price target of $114.00.
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Christopher Nardone has given his Hold rating due to a combination of factors impacting Deckers Outdoor’s stock. While the company reported strong first-quarter results and an improved margin trajectory, these positives are counterbalanced by softness in the direct-to-consumer (DTC) segment for both UGG and HOKA brands. The growth projections for HOKA and UGG remain intact, with HOKA expected to grow in the mid-teens and UGG in the mid-single digits, but the uncertainty in the U.S. DTC trajectory poses a risk to potential upside in the stock’s valuation.
Moreover, while HOKA experienced robust international and wholesale growth, the U.S. DTC growth was slightly weaker, which could be a concern given the intense competition in the running category. Additionally, potential headwinds such as tariffs, material costs, and higher promotions could impact gross margins, although some of these may be mitigated by pricing strategies. Overall, the balanced risk/reward profile at the current valuation justifies the Hold rating, as significant improvement in the DTC segment is necessary to unlock further upside.
In another report released on July 22, Piper Sandler also maintained a Hold rating on the stock with a $100.00 price target.