Decker Outdoor (DECK, $148.59) gets analyst upgrade; shares jump +4%
Decker Outdoor shares climbed +4% Tuesday, on a rating upgrade by the Bank of America Merrill Lynch.
Bank of America analysts raised their rating on the footwear company’s stock to buy from neutral. Analyst Rafe Jadrosich also upped his price target to $180 from $150.
In a note to investors, Jadrosich mentioned earnings per share growth opportunity from Decker’s share buybacks, and low-to-mid single digit revenue growth (largely driven by the company’s HOKA brand) as factors behind the analyst’s optimism. According to the analyst, HOKA is expected to grow +40% in fiscal year 2019, thanks to new product offerings and market share gains in the running specialty segment.
Jadrosich believes that gross margin of Decker’s brand UGG could be at its peak, and that there is operating margin opportunity from cost savings and improving HOKA margins.
DECK's Stochastic Oscillator is staying in oversold zone for 5 days
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Notable companies
The most notable companies in this group are Nike (NYSE:NKE), Skechers USA (NYSE:SKX), VF Corp (NYSE:VFC), G-III Apparel Group Ltd (NASDAQ:GIII), Canada Goose Holdings (NYSE:GOOS), Lakeland Industries (NASDAQ:LAKE).
Industry description
Apparel/footwear might be slightly more ‘cyclical’ in the largely non-cyclical category of non-durables. While digital giants like Amazon have been rapidly expanding their presence, traditional clothing/footwear retailers have also been bulking up their online presence in recent years, to milk the burgeoning trend of online shopping among consumers across the globe. The apparel and footwear retail market was valued at around $ 360 billion in 2018, and this figure was expected to reach about $386 billion by 2020 (according to a Statista report). NIKE, Inc, V.F. Corporation and Under Armour, Inc. are some of the companies with the largest U.S. stock market caps in this segment.
Market Cap
The average market capitalization across the Apparel/Footwear Industry is 6.29B. The market cap for tickers in the group ranges from 1.66K to 140.24B. NKE holds the highest valuation in this group at 140.24B. The lowest valued company is SQBGQ at 1.66K.
High and low price notable news
The average weekly price growth across all stocks in the Apparel/Footwear Industry was 2%. For the same Industry, the average monthly price growth was 1%, and the average quarterly price growth was 3%. TALN experienced the highest price growth at 59%, while DLAPQ experienced the biggest fall at -57%.
Volume
The average weekly volume growth across all stocks in the Apparel/Footwear Industry was -9%. For the same stocks of the Industry, the average monthly volume growth was 21% and the average quarterly volume growth was 5%
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
Valuation Rating: 49
P/E Growth Rating: 55
Price Growth Rating: 60
SMR Rating: 64
Profit Risk Rating: 80
Seasonality Score: -4 (-100 ... +100)