Skechers USA Unlikely To Raise Outlook Due To Eurozone Hurdles, Says Analyst
Portfolio Pulse from Shivani Kumaresan
Wedbush analyst Tom Nikic maintained an Outperform rating on Skechers USA Inc (SKX) with a $68 price target, citing Eurozone challenges that may prevent an outlook raise. Nike Inc (NKE) and Levi Strauss & Co (LEVI) reported worsening EMEA trends, impacting SKX due to its significant sales in Europe. Despite strong demand and innovation, the analyst expects normalization in growth and a net EPS headwind from a stronger U.S. dollar. However, positives include product innovation, momentum in Asia, U.S. wholesale channel recovery, and a strong balance sheet.
April 19, 2024 | 5:44 pm
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Levi Strauss & Co's reported worsening EMEA trends may also contribute to cautious investor sentiment towards Skechers due to similar market exposures.
Similar to Nike, Levi Strauss's worsening trends in the EMEA region could lead to a cautious outlook from investors towards companies like Skechers that have significant exposure to Europe. This could potentially impact Skechers' stock price in the short term.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
NEGATIVE IMPACT
Nike Inc reported worsening EMEA trends, which may indirectly impact investor sentiment towards companies with significant European exposure like Skechers.
Nike's reported worsening trends in the EMEA region could lead investors to be cautious about other companies with substantial sales in Europe, such as Skechers. This indirect impact could affect investor sentiment and potentially the stock price in the short term.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
NEUTRAL IMPACT
Wedbush analyst sees Eurozone challenges limiting upside for Skechers, expects sales normalization and a net EPS headwind from a stronger U.S. dollar, but remains positive due to innovation and Asia momentum.
The analysis suggests that while there are short-term challenges for Skechers, particularly from the Eurozone and a stronger U.S. dollar, the company's strengths in innovation and its position in Asia, along with a strong balance sheet, provide a balanced view. The stock's slight decline reflects market reaction to these mixed factors.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100