Stifel Reiterates Buy on Wolverine World Wide (WWW)

Stifel maintained a Buy rating and $25.00 price target on Wolverine World Wide (NYSE: WWW). Despite the difficult 2015 and challenging optics early in 2016, WWW has a portfolio of durable brands with limited fashion risk. Restructuring in the StrideRite business will challenge the topline but result in a more stable foundation and be a net benefit to margin.

Analyst Jim Duffy commented, "We see WWW as an intriguing idea for value investors given the 1) durable brands in the portfolio, 2) opportunities for margin improvement from restructuring, 3) underlying free cash flow value support, and 4) potential for a return to growth in FY17. At 6.9x our FY16 EBITDA of $297mn with a low double digit free cash flow yield on the equity and sightlines to WWW to exiting FY16 with a net debt / ttm EBITDA below 2x we continue to see a buying opportunity in WWW shares. The double digit free cash flow yield on the equity we view as providing a measure of downside protection while enabling participation in the call option value of potential for improving fundamentals. Scenario analysis suggests that over a 12-18 month period we could see a 3 to 1 risk/reward range favoring the upside. We maintain our Buy rating and $25 12 mos. price target (9.5x TEV/EBITDA multiple our FY17 adj. EBITDA)."

For an analyst ratings summary and ratings history on Wolverine World Wide click here. For more ratings news on Wolverine World Wide click here.

Shares of Wolverine World Wide closed at $16.59 yesterday.

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