I guess Skechers efforts on new line of products, store renovation, inventory management, online presence, etc. has put them in a position for the upgrade yesterday.
In a note to clients, Susquehanna Research analyst Sam Poser upgraded the company to positive from neutral and raised his target price on the stock to $37 from $32, noting that his check-ins at various retail locations and also recent results from wholesalers point to stronger demand for the company’s products.
“Proprietary checks and recent results from wholesale partners indicate Skechers’ business is gaining momentum,” Poser said, adding that “men’s and women’s fashion athletic styles and men’s non-athletic styles sell-through rates are accelerating,” even as the suggested retail price of targeted styles are being raised.
So the new target is now $37.
The $37 target would imply that the price finally breaks out of the $12 range dating back 12 months.
Despite Skechers’s sales growing 11.5% to $4.6 billion in 2018 and opening 25 company-owned domestic stores and 26 company-owned international stores in 2018, their annual sales growth continues to decelerate.
So, although Skechers got upgrade and although the price rose 3% on the news, it was actually an opportunity to short the stock as suggested by the daily supply at $34 with a price target at the gap fill at $28.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.
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