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Analyst starts shoe sector coverage with 'Neutral'

NEW YORK (AP) -- The shoe market is mainly mature in the U.S., an analyst said Tuesday, but there are some good buys in the sector, particularly athletic shoes and long-lasting trends like Crocs Inc.

Overall, Goldman Sachs analyst Taposh Bari initiated the sector with a "Neutral" rating and said most companies are older and at the peak of the fashion cycle, so he does not expect broad gains in the sector.

One exception is athletic shoes, he said, which will likely benefit from fashion trends and improving profitability, Bari said. He initiated coverage of Foot Locker Inc. with a "Buy" rating. Its shares rose 37 cents to $35.25 in afternoon trading.

He also gave Crocs Inc., which makes colorful plastic shoes, a "Buy" rating, saying that investors have misinterpreted the shoe brand as a fad.

"We see Crocs as a lifestyle brand with global appeal that appears both proven and sustainable," he wrote in a note to investors.

Less appealing is Steve Madden Ltd, Bari said, and gave the stock a "Sell" rating. He said the non-athletic shoe trends have peaked, and Steve Madden is dependent on the fashion cycle. Shares rose 24 cents to $44.33 anyway.

Other shoe makers fit in with his overall "Neutral" view of the sector, including The Finish Line Inc., Wolverine World Wide Inc. and Deckers Outdoor Corp.

The Finish Line shares fell 28 cents to $20.37. Wolverine World Wide shares fell 49 cents to $43.20.