Williams upgrades ‘inexpensive’ Crocs to Buy after China tariff cut

Williams Trading upgraded Crocs (CROX) to Buy from Hold with a price target of $135, up from $83. The company’s Q1 beat was driven by international currency neutral revenue growth of 12% for the Crocs brand, and HeyDude sales that “were less bad than expected,” the analyst tells investors in a research note. The firm says Crocs “prudently” withdrew its outlook, as the tariff and demand outlook “remained cloudy.” Today’s announcement reducing the tariffs on Chinese goods from 145% to 30% were not anticipated by Crocs, Williams points out. The firm views the stock as “inexpensive” and says Crocs is “adequately providing” shareholder returns. A focus less on gaining shelf space and more on creating brand equity would increase the value of the Crocs and HeyDude brands, and increase the value of the total company, contends Williams Trading.