Stifel raises Crocs to buy as confidence increases

This post was originally published on this site

Analysts told investors the firm is opportunistically upgrading the stock, emboldened by its product/geo diversification and balance sheet optionality.

“FY2Q results were a mixed bag but positives outweigh the negative and the -14.6%reset in shares presents an opportunity,” analysts wrote. “Market disappointment reflects the shortfall from HEYDUDE wholesale (~15% of global revenue) but looks past positive developments for the Crocs brand (~75% of global revenue).”

They explained that specific factors showcasing improved balance and increasing the firm’s confidence in the company into FY24 include the Crocs North America brand strength and product diversification, Crocs’ international strength, and the company’s debt reduction.

“Profit pool diversification, improved balance sheet optionality, and a very forgiving valuation increase our confidence in risk adjusted return prospects for CROX shares,” analysts concluded.