Forward PE multiples are one of the most important metrics used for investment decisions. As of December 31, Decker Outdoor (DECK) was trading at a 12-month forward PE ratio of 17.8x. In comparison, Foot Locker (FL), Nike (NKE), and Skechers (SKX) are trading at PEs of 10.9x, 25.4x, and 11.5x, respectively, as of December 31.
Comparing EPS growth estimates for Deckers and its peers
For fiscal 2019, which ends in March 2019, analysts forecast Deckers to report adjusted EPS of $6.86, a 19.5% increase YoY. Deckers Outdoor’s management expects the 2019 adjusted EPS to be $6.25–$6.45. A lower effective tax rate and buybacks along with top-line growth could cushion the bottom line.
In comparison, Wall Street analysts expect Foot Locker to report adjusted EPS growth of 10.2% to $4.53 in fiscal 2018 and 8.5% to $4.92 in fiscal 2019. Analysts project Nike’s EPS to rise 10.5% to $2.64 in fiscal 2019. Analysts estimate that Skechers’ (SKX) EPS will increase 3.8% to $1.85 in 2018 and ~8.0% to $1.99 billion in 2019.
Analysts’ ratings for DECK and peers
As of December 31, of the 15 analysts covering Deckers Outdoor stock, 20.0% rated it as a “buy,” while 80.0% rated it as a “hold.” On December 19, Susquehanna upped the price target for DECK to $140.00 from $132.00. Currently, analysts’ 12-month average target price for Deckers Outdoor stock is $126.31, which reflects a 1.3% downside to the stock price as of December 31.
Meanwhile, out of 23 analysts covering Foot Locker (FL), ~57.0% gave it a “buy,” while 30.0% rated it as a “hold.” For Foot Locker, the mean target price is $58.57, reflecting a potential 10.1% upside.
65.0% of the 37 analysts covering Nike (NKE) stock recommended a “buy” rating, while 32.0% rated it a “hold.” For Nike, the mean target price is $86.44, which indicates a 16.6% upside.
For Skechers (SKX), 50.0% of the 14 analysts rated the stock a “buy,” while the rest of the analysts rated it as a “hold.” For Skechers, the mean target price is $32.50, which reflects ~42.0% upside.