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Why Most Analysts Have Rated Deckers as a ‘Hold’

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Why analysts remain on the sidelines

On July 18, Deckers Outdoor (DECK) was rated as a “hold” by 75% of the 16 analysts covering its stock. Another 19% rated the stock as a “buy,” and the remaining analysts rated the stock as a “sell.”

Deckers’ performance in fiscal 2019 is likely to be challenged, as both UGG brand sales and DTC comps are expected to be pressured. UGG sales will likely be negatively impacted by store closures and the allocation and segmentation of its franchises. Teva sales are expected to be marred by the cleanup of overseas distribution. DTC comps will likely be hit by a tough retail landscape and normalized weather in the current fiscal year. Deckers also expects reorders to be lower than in-season cancellations.

In contrast, for Foot Locker (FL), 57% of the 23 analysts covering the stock have rated it as a “buy,” while 35% have rated it as a “hold.”

Of the 13 analysts covering DSW (DSW) stock, 77% have rated it as a “hold,” while the remaining 23% have rated it as a “buy.”

A total of 92% of the 12 analysts tracking Skechers (SKX) stock have given it “buy” ratings. The remaining analysts have given it “hold” ratings.

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Target price changes

There have been no changes in the price targets for Deckers Outdoor in the last 30 days. The 12-month average target price for DECK is $109.08, which reflects a 6.3% downside as of July 18.

On July 21, UBS initiated coverage of Foot Locker with a “neutral” rating and a price target of $59.00. Currently, analysts’ 12-month average target price for FL stock is $59.19, which reflects a 12.1% upside to the stock as of July 18.

There’s been no price revision activity for DSW over the past 30 days. The stock’s 12-month average target price is $24.43, which reflects a 12.3% downside as of July 18.

There has been just one change in Skechers’ price target over the past 30 days. On July 16, UBS lowered its price target on SKX stock to $41.00 from $42.00. The 12-month average target price for SKX stock is $42.10, which reflects a 28.9% upside as of July 18.

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