Skechers USA (SKX) may have been described as a better investment than Nike (NKE) today but it couldn’t help its share price running backwards 13%.
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Skechers is “Underappreciated”
In a report from UBS Securities Skechers USA was described – despite near-term challenges – as an “underappreciated” growth stock with strong earnings potential. It said the footwear company’s strong global brand, robust product demand and “superior distribution model” will drive faster-than-expected sales, earnings before interest and taxes margin and earnings growth. Here is the kicker – UBS said these factors made it a “better investment than Nike”.
Digging deeper into those challenges UBS said they included unfavorable foreign exchange fluctuations, a higher tax rate, and macroeconomic challenges in China. As such it has lowered the company’s 2025, 2026, and 2027 earnings per share estimates by nearly 11%, 13%, and 9%, respectively. It also cut its price target to $90 from $92. However, it still remained confident in the group’s long-term growth potential maintaining a Buy rating.
Skechers Has a Robust Outlook
It came only a day after Skechers USA announced record-breaking annual sales of $8.97 billion for the year 2024, up 12.1% on the previous year. Four-and-a-half-star TipRanks rated analyst Rick Patel of Raymond James was also cheering on Skechers. He lowered his price target on the firm from $80 to $75 but kept an Outperform rating. He said that although Skechers’ 2025 revenue guidance reflected a deceleration from 2024 it was still robust. Patel said Skechers’ long-term levers were intact and that it was a global market share gainer with strong demand from current innovation”.
Is SKX a Good Stock to Buy?
On TipRanks, SKX has a Strong Buy consensus based on 9 Buy and 2 Hold ratings. Its highest price target is $90. SKX stock’s consensus price target is $80.10 implying an 21.08% upside.
