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How Deckers’ Forward PE Stacks Up with Peers

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Forward PE

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.

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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.

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