Deckers Outdoor, the Consumer Cyclical sector company, was revisited by a Wall Street analyst yesterday. Analyst Peter McGoldrick from Stifel Nicolaus upgraded the rating on the stock to a Buy and gave it a $117.00 price target.
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Peter McGoldrick has given his Buy rating due to a combination of factors that highlight Deckers Outdoor’s strong growth potential and financial health. The company exhibits a robust operating model with a 29% return on invested capital, which is significantly higher than the industry average. This indicates an efficient use of capital and a sustainable operating margin above 20%, assuming no major slowdown in revenue growth.
Additionally, Deckers Outdoor’s diversified brand portfolio, particularly the HOKA and UGG brands, shows promising growth prospects. The HOKA brand is expected to achieve double-digit growth through expanded distribution and lifestyle adoption, while UGG is anticipated to grow through product and regional diversification. The company’s solid balance sheet, with $2 billion in net cash and a significant share repurchase authorization, provides further financial flexibility, supporting a positive risk/reward outlook. These factors, combined with a favorable valuation and a reaffirmed target price of $117, underpin McGoldrick’s Buy recommendation.
In another report released on November 1, TR | OpenAI – 4o also reiterated a Buy rating on the stock with a $91.00 price target.