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Buckingham Research Downgrades Steven Madden to ‘Neutral’

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Price movement

Steven Madden (SHOO) has a market cap of $2.2 billion. It fell by 1.9% to close at $35.60 per share on July 18, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -0.11%, 4.1%, and 17.8%, respectively, on the same day. SHOO is trading 2.9% above its 20-day moving average, 4.6% above its 50-day moving average, and 5.2% above its 200-day moving average.

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Related ETF and peers

The Vanguard Extended Market ETF (VXF) invests 0.05% of its holdings in Steven Madden. The ETF tracks a market-cap-weighted version of the S&P Total Market Index, excluding all S&P 500 stocks. The YTD price movement of VXF was 6.7% on July 18.

The market caps of Steven Madden’s competitors are as follows:

  • Skechers USA (SKX): $5.1 billion
  • Deckers Outdoor Corporation (DECK): $2.0 billion
  • Guess (GES): $1.3 billion

Steven Madden’s rating

Buckingham Research has downgraded Steven Madden’s rating to “neutral” from “buy.” It also reduced its stock price target to $36.0 from $40.0 per share.

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Performance of Steven Madden in 1Q16

Steven Madden reported 1Q16 net sales of $329.4 million, a rise of 1.7% compared to net sales of $323.9 million in 1Q15. The company’s gross profit margin and income from operations rose by 2.6% and 0.11%, respectively, in 1Q16 compared to the corresponding period last year.

Its net income and EPS (earnings per share) rose to $20.0 million and $0.33, respectively, in 1Q16 compared to $19.8 million and $0.32, respectively, in 1Q15.

SHOO’s cash and cash equivalents and inventories fell by 2.1% and 21.3%, respectively, in 1Q16 compared to 4Q15. Its debt-to-equity ratio fell to 0.30x in 1Q16 compared to a debt-to-equity ratio of 0.35x in 4Q15.

Projections

The company has made the following projections for fiscal 2016:

  • net sales growth in the range of 2% to 4%
  • EPS in the range of $1.93 to $2.03

In the next part, we’ll discuss Packaging Corporation of America.

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