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Deckers Outdoor Corp. Message Board

  • reality90210 reality90210 Oct 10, 2013 10:50 AM Flag

    Credit Suisse's Track record on DECK ...

    September 2011 --
    In a note to clients, Credit Suisse writes, "We initiate coverage with an Outperform rating and a $110 target price. We are compelled by the revenue and earnings growth opportunities even while assuming likely persistence of higher marketing, SG&A, and capital investments. We view 2H 2011 and 2012 consensus estimates as conservative, suggesting an opportunity for multiple expansion pending validation of sustained growth potential into 2012:"


    JULY 2013 ---
    Credit Suisse downgraded Deckers Outdoor (NASDAQ: DECK) from Neutral to Underperform.


    Any questions???

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    • I will agree that they are for the most part conservative with their analysis of stocks that they cover, but they are more bearish on this one with a $47 PT. I have to agree with them to some extent. You have to ask yourself why retailers would want to load up on UGGs inventory when in the past they have been burned with slower than expected sales and mild winters. Plus SG&A expenses have been coming in high the past several quarters. To invest in this stock you have to be comfortable that sales will pick up significantly in Q4 2013 compared to Q4 last year. With the weakness many retailers have been experiencing lately I'm not sure I'd be willing to take that gamble.

      • 2 Replies to steeltrader99
      • True the retailers have been burned with UGG inventory, but this is a turnaround story. DECK is doing everything in their power to make things right and that is why I would invest in them.
        Some components to think about. UGG PURE, lower sheepskin costs, expansion/new stores, worldwide presence, better marketing, better lineup of shoes, diversification, mens line, margins and earnings per share per year, direct to consumer eCommerce sales (this area is expanding significantly), additional brand expansion (Teva, Sanuk are doing quite well), happy customers, quality. The only thing they really can't control is the weather, but imagine if the weather cooperates this year.

      • No way. You are pretending companies are just valued based on short term things like one season.

        It is more than that. Interest rates are factored in as well as oil prices as well as the FUTURE POTENTIAL for growth.

        A year ago, Deckers wasn;t worth as much because the interest rates were 1.5-1.6% on the ten year. You could get paid a better return investing in the dow dividend payers than the ten year and those stocks being STAPLES, basically taking much less risk than investing in a company like Deckers or Under Armour, etc.

        But now the interest rate is more than 100 basis points higher in 12 months and if one is going to invest in stocks as opposed to the risk free ten year, then they aren't going to invest in the staples offering the same return as the ten year but more risk because it is a business subjective to the whims of the economy.

        They are going to ask to be paid for that risk, hence investing in fast growing companies and those companies offering more return in cash than the ten year rate, aka deckers.

        Which is why I believe we get to 80 in the short tem, ie this year.


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