Crocs upgraded to Overweight at Piper Sandler on North America recovery signs

Investing.com -- Crocs was upgraded to Overweight from Neutral by Piper Sandler, which also raised its price target to $150 from $95, citing improving demand trends in North America, early signs of wholesale stabilization, and a more attractive valuation.

The brokerage said Crocs' North America direct-to-consumer (DTC) business returned to mid-single-digit growth in the first quarter of 2026, its strongest performance since the second quarter of 2024, while the Heydude brand is showing encouraging signs of recovery. Piper also believes the company's earnings estimates remain biased to the upside after Crocs exceeded consensus expectations by an average of 14% over the past four quarters.

Piper said product innovation, easing year-over-year comparisons and improving consumer engagement are supporting the outlook. New product launches such as the Classic Ballet clog, Saturday sandal and brand collaborations have driven stronger demand, while Heydude has gained traction with male consumers and improved performance on TikTok and its own website.

The firm expects TikTok to become an increasingly important sales driver, forecasting the platform will account for about 3% of Crocs brand sales in 2026, up from roughly 2% in 2025, contributing around two percentage points to DTC growth and one percentage point to overall company growth. Piper also believes improving online demand is beginning to support wholesale orders in North America after a prolonged downturn.

While the brokerage acknowledged tariff-related pressure on gross margins in the second quarter, it said stronger markdown discipline, supply chain efficiencies and additional cost savings should help offset headwinds. Piper forecasts earnings per share of $13.90 for 2026 and $15.24 for 2027, noting that under a bullish scenario the company could approach its 2027 earnings estimate as early as this year.

The broker added that the company's ongoing share repurchase program and approximately $100 million in incremental cost savings should further support earnings and margin expansion, while valuation remains attractive at around eight times forward earnings despite the stock's recent rebound.

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