Jefferies Pounds the Table on Deckers Outdoor (DECK), Shares Ramp

February 4, 2013 11:02 AM EST
Get Alerts DECK Hot Sheet
Price: $59.68 +0.30%

Rating Summary:
    16 Buy, 16 Hold, 3 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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Shares of Deckers Outdoor (NASDAQ: DECK) are sharply higher Monday after positive comments from an analyst, which noted strong trends for the UGG brand.

Jefferies' analyst Randal Konik reiterated his Buy rating and boosted his price target on the footwear maker from $50 to $60, saying his conviction about the stock is "higher than ever."

These comments come after online trends and store checks indicate the UGG brand is still a core winter staple and the company benefited as January's temperatures dropped fast.

Konik noted that recent online data shows that trends are not as bad as investors fear. "Google searches through the holiday season for "UGG boots" are quite
similar to last year, and visitors to the website are up YoY, the analyst comments. "Further, UGG brand was the number one online searched term during the 2012 shopping season and ecommerce sales grew 24% YoY on Black Friday and Cyber Monday. We believe it indicates that the brand is still very relevant (and NOT dead)."

The market continues to have a negative view of the stock, as witnessed by the high short interest. Short s short interest is ~15M shares or over 40% of shares outstanding, he notes.

The stock is cheap, the analyst said, tradning at 9x CY'13 EPS and 7x EBITDA, wel below the growth retailer group average. "With lower product costs, leaner inventories, easy compares, and presumably a more normal winter than last year, sales should stabilize and margins should inflect upwards, driving earnings growth and multiple expansion, he said. "As such we would be buying this stock aggressively at current levels."

For an analyst ratings summary and ratings history on Deckers Outdoor click here. For more ratings news on Deckers Outdoor click here.

Shares of Deckers Outdoor are up 5.36 percent to $42 mid-day Monday.

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