On Monday, a BTIG analyst maintained a Buy rating for Deckers Outdoor (NYSE: NYSE:DECK), with a price target set at $1,020. The endorsement comes ahead of the company's fiscal fourth-quarter earnings report, which is expected to be released after the market closes on Thursday, May 23, 2024.
The analyst anticipates that the company's earnings per share for the quarter will surpass consensus expectations, citing continued strength in the brand's HOKA and UGG product lines.
Despite some concerns about a potential slowdown in HOKA's performance during the quarter, the analyst suggests that inconsistencies observed in February are likely due to the timing of product launches rather than a decrease in consumer demand. The UGG brand, known for its popular sheepskin boots, has reportedly maintained its momentum, with expectations of an uptick in the fiscal fourth quarter. This projected increase is attributed to the carryover of popular holiday styles into the new quarter, as well as the successful performance of seasonal products.
According to the analyst, there is a possibility that Deckers' management will issue conservative guidance for fiscal 2025, potentially falling below consensus estimates. However, the market is presumed to have already factored in the prospect of a cautious outlook. The analyst advises investors to view any potential share price decline following the guidance as an opportunity to buy.
The firm's estimates remain unchanged, and the analyst reiterates the confidence in Deckers Outdoor by selecting it as a Top Pick for 2024. The $1,020 price target reflects this positive sentiment, suggesting a significant upside from the current trading levels. Deckers Outdoor is scheduled to provide more details on its performance and outlook in the upcoming earnings report later this week.
InvestingPro Insights
As Deckers Outdoor (NYSE: DECK) prepares to release its fiscal fourth-quarter earnings report, insights from InvestingPro suggest a company in a strong financial position. With a higher-than-average P/E ratio of 32.13, Deckers Outdoor is trading at a premium, reflecting investor confidence in its near-term earnings growth. This is underscored by the fact that 5 analysts have revised their earnings upwards for the upcoming period, as per InvestingPro Tips.
Deckers' robust fundamentals are highlighted by a balance sheet that holds more cash than debt, and its cash flows can sufficiently cover interest payments, indicating financial stability and resilience. Moreover, the company's liquid assets exceed short-term obligations, providing it with a cushion to navigate any potential market volatility. These attributes may offer reassurance to investors considering the firm's stock, especially in light of the analyst's Buy rating and a price target of $1,020.
For those seeking a deeper dive into Deckers Outdoor's financial health, more InvestingPro Tips are available at https://www.investing.com/pro/DECK. To enhance your investment analysis, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 16 additional InvestingPro Tips available to help guide your investment decisions regarding Deckers Outdoor.
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