Crocs Inc (NASDAQ: CROX) has already gained about 30% in a couple of weeks but a Raymond James analyst is convinced that the stock is not out of juice just yet.
Crocs stock could climb further to $115Rick Patel upgraded the footwear company to “strong buy” and added it as well to his list of “current favourites” on Tuesday. His $115 price objective suggests another 15% upside.
The analyst is constructive on Crocs stock partially because the management lowered its future outlook for “HEYDUDE” earlier this month. His research note reads:
A sizable guide down of HEYDUDE [was] a significant de-risking event. The stock being higher since then shows how low the bar was for CROX and we see further upside ahead.
Wedbush out w/ a note saying HeyDude sell through improving… HD has been a drag on the stock since they acquired the brand, so any improvements would create some nice NT upside as the core Crocs brand remains v healthy.
"While $CROX shares have come under pressure recently due… https://t.co/CdgyoJh19S pic.twitter.com/RhRKyKd4LN
Note that Crocs topped $1.0 billion in revenue in its recently reported quarter.
Crocs will improve its financial results in 2024Rick Patel likes Crocs stock as its current valuation signals attractive setup for 2024.
The Raymond James analyst expects the Nasdaq-listed firm to improve its per-share earnings and deliver “strong and durable” operating margins as it pays down debt and buys back stock moving forward.
At less than eight times earnings, he’s convinced that $CROX is currently trading at a deep discount “given our expectation of moderate revenue growth”.
Crocs now sees up to a 6.0% annualised growth in HEYDUDE this year versus up to 16% it had guided for earlier. Patel expects the U.S. firm to easily meet Street estimates in FY24 as well.
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