NEW YORK (AP) -- Sterne Agee analyst Sam Poser upgraded Uggs maker Deckers Outdoors Corp. based on hopes for better boots late next year, driving Deckers shares higher before Monday's opening bell.
The company's recent revenue drop from its Uggs brand has led many to forecast the end of the sheepskin boots' popularity. They have been holiday best-sellers for several years.
Poser said he's been critical of Deckers' decisions this year, such as raising prices without improving Uggs designs. But in a Monday research note, he said now he's more optimistic about the company's prospects, citing positive reviews from people who have seen the Uggs lineup for fall 2013.
He upgraded the Goleta, Calif., company to "Buy" from "Neutral" and set a $65 price target on its shares. Shares of Deckers rose $3.61, or 9.4 percent, to $41.90 in premarket trading. The stock has lost 49 percent this year.
Deckers' sales and profitability will improve in the second half of next year, Poser expects, but he cautioned that current sales trends remain pressured.
He cut his 2012 earnings estimate on Deckers by 10 cents to $3.06 per share. That's below analysts' average prediction of $3.34 per share, according to a FactSet poll.
But he raised his forecast for 2013 profit by 47 cents to $3.78 per share — still just shy of analysts' average estimate of $3.80 per share.