Citi analyst Corinna Van der Ghinst backs the rating, citing that both firms "emerged from significant company-specific headwinds that weighed on earnings and valuation in recent years (SKX from the toning shoe bubble and DECK from the 80% spike in sheepskin costs in 2011-2012), with management focused on establishing more diversified, sustainable business models."
Ghinst states that both companies have shown strong improvement in 2013, but are both off from the peak operating margins from 2010. Ghinst expects them to deliver strong double-digit EPS growth over the next three years through through "more consistent, diversified top-line growth, mix shift from global Direct to Consumer (DTC) expansion, and better operating expense leverage."
Skechers was trading up $1.08 to $42.02 from Friday's close of $40.94, while Deckers was trading up $1.21 to $80.38 from the previous close of $79.17.
- Bull of the Day: Skechers (SKX) - Bull of the Day
- Upgraded Research Report on Deckers - Analyst Blog
- Will JC Penney (JCP) Miss Earnings Estimates? - Analyst Blog
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