Auriga Starts Skechers USA (SKX) at Hold
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Price: $63.13 --0%
Rating Summary:
11 Buy, 16 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
11 Buy, 16 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Auriga initiates coverage on Skechers USA (NYSE: SKX) with a Hold. PT $16.00.
The firm comments, "Our Hold rating is predicated on our belief that our estimates for 2011 and 2012 are conservative but our conviction is low that upside from current estimates is likely. SKX benefitted from the toner footwear craze in 2010 but conversely suffered financially thereafter from mismanagement of inventory. In addition, the company lacked a substitute hot new product in 2011. Earnings per share were $2.78 in 2010, up +139% versus $1.16 in 2009. However, we are forecasting a loss of ($0.22) in 2011 as lack of exciting new products likely could drive sales 10% lower in the current fiscal year. Write down of excess toning inventory and significant markdowns also are projected to drag profitability to a loss. Given the significant fluctuations in profitability during the past 12 months, the likelihood of ongoing sales declines for the next several quarters and some uncertainty regarding gross margins in 2H we are initiating coverage with a Hold rating. Our $16 PT assumes a 16x multiple on our 2012 EPS estimate."
For more ratings news on Skechers USA click here and for the rating history of Skechers USA click here.
Shares of Skechers USA closed at $16.21 yesterday.
The firm comments, "Our Hold rating is predicated on our belief that our estimates for 2011 and 2012 are conservative but our conviction is low that upside from current estimates is likely. SKX benefitted from the toner footwear craze in 2010 but conversely suffered financially thereafter from mismanagement of inventory. In addition, the company lacked a substitute hot new product in 2011. Earnings per share were $2.78 in 2010, up +139% versus $1.16 in 2009. However, we are forecasting a loss of ($0.22) in 2011 as lack of exciting new products likely could drive sales 10% lower in the current fiscal year. Write down of excess toning inventory and significant markdowns also are projected to drag profitability to a loss. Given the significant fluctuations in profitability during the past 12 months, the likelihood of ongoing sales declines for the next several quarters and some uncertainty regarding gross margins in 2H we are initiating coverage with a Hold rating. Our $16 PT assumes a 16x multiple on our 2012 EPS estimate."
For more ratings news on Skechers USA click here and for the rating history of Skechers USA click here.
Shares of Skechers USA closed at $16.21 yesterday.
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