Canaccord Genuity Reiterates Buy Ahead of Deckers Outdoor (DECK) Q4 Results
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Canaccord Genuity reiterates a Buy rating and $84 price target on Deckers Outdoor (NASDAQ: DECK) leading up to its FQ4 results. Analyst Camilo Lyon is expecting breakeven EPS on sales growth of 8%. DECK is scheduled to report its FQ4 earnings after market closes today.
Lyon commented, "We are modeling breakeven EPS (in line with consensus) on sales growth of 8% vs. consensus of 9%. Despite our expectations for challenging trends in key tourism markets coupled with continued FX pressures, we believe the extended winter weather, particularly in February, helped retailers clear through carryover UGG inventory from the holiday period, thus setting the stage for positive fall '15 order growth and backlogs. Store comps also likely remained negative (we are modeling -HSD comps in line with guidance) but we believe e-commerce growth likely helped mitigate the declines. As for gross margin, we are projecting 45bps of contraction as benefits from lower sheepskin costs and UGG Pure were likely more than offset by FX headwinds."
Lyon also added, "In conversations with our industry contacts, we believe DECK could speak to a fall backlog that is up high single digits with all the brands contributing to the growth. Assuming we are correct, we believe this would be viewed favorably by investors. With the stock trading at 14x 2015E EPS and 7x EBITDA and short interest at 13%, expectations appear low. As such, we believe the risk/reward is biased to the upside and thus reiterate our BUY rating."
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 closed at $79.80 yesterday.
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