Wall Street’s take on Skechers
Skechers is covered by 11 Wall Street analysts who jointly rate the stock a 1.5 on a scale of 1 for “strong buy” to 5 for “sell.” The company has the best rating among the sportswear stocks covered in this series.
All the analysts covering Skechers recommend a “buy” for the stock. It was upgraded by Argus Research from a “hold” to a “buy” on December 15, 2017.
“We believe a recovery in the company’s domestic wholesale business is underway. While wholesale revenue in the U.S. was up just 1.4% in 3Q17, we believe it will improve driven by an improvement in U.S. retail comps,” said Argus Analyst John Staszak.
Skechers was also recently named as a “top idea for 2018” by Cowen analyst John Kernan, who wrote in a client note, “The breadth and depth of the Skechers assortment and the brand’s global reach, category expansion opportunities and consumer perception is underappreciated (based on relative valuation to peers).”
Share price movement
Skechers is not only Wall Street’s favorite but also a dream stock for investors. The company has risen 55% YTD (year-to-date). Like other retailers, Skechers stock has also rallied over the past month, rising 17.5%.
The company is close to its 52-week high. However, unlike its competitors, the company still has an upside. Its stock is projected to rise 3% over the next year. In comparison, the stock of Under Armour (UAA), Lululemon Athletica (LULU), Nike (NKE), and Columbia Sportswear (COLM) are expected to fall 11%, 1%, 6%, and 3%, respectively.
ETF investors seeking to add exposure to SKX can consider the First Trust Consumer Discretionary AlphaDEX ETF (FXD), which invests ~1.7% of its portfolio in the company.