On Friday, UBS reaffirmed its neutral position on Steven Madden (NASDAQ:SHOO), maintaining a price target of $46.00. The firm's analysis suggests that while Steven Madden holds a strong position as a leader in the women's fashion footwear sector, there are factors that could constrain the stock's performance. The forecast for consumer spending on women's fashion footwear in the United States is expected to remain subdued. Additionally, potential margin pressures from the company's acquisition of Almost Famous could continue to impact earnings.
The firm's earnings per share (EPS) estimate for the fiscal year 2024 stands at $2.60, slightly below the consensus of $2.64 among other analysts. UBS anticipates that the price-to-earnings (P/E) ratio for Steven Madden's shares will not vary significantly in the absence of a significant market catalyst that could alter the perception of the company's long-term earnings potential. Currently, no such catalyst appears to be on the horizon.
The neutral rating follows a meeting with Steven Madden's management on June 5 in New York City, which reinforced UBS's perspective on the stock. The meeting served to validate the firm's stance and expectations regarding the company's financial outlook.
UBS's position reflects a cautious outlook for Steven Madden, acknowledging the company's growth opportunities while also recognizing the challenges it faces. The firm's analysis indicates that until a transformative event occurs, the stock is likely to remain within its current trading range.
"In other recent news, Steven Madden has been the subject of attention from analysts and investors alike. BTIG recently increased the price target on Steven Madden to $53, reaffirming a Buy rating on the stock. This upgrade followed a series of meetings with key executives, which provided insights into the company's performance and market trends, including a notable uptick in sandal sales and strong sell-throughs.
In terms of earnings, BTIG has adjusted its second-quarter earnings per share (EPS) estimate for Steven Madden to $0.55, up from $0.52, based on anticipations of a stronger top-line growth of 17%. The company has also reported a robust start to 2024, with a 19% increase in revenue and a 30% rise in diluted EPS compared to the same period in 2023.
These recent developments highlight Steven Madden's strategic focus on expanding international markets, diversifying beyond footwear, and strengthening its direct-to-consumer businesses. The company maintains its annual outlook, projecting revenue growth of 11% to 13% for the year, with diluted EPS expected to remain within the range of $2.55 to $2.65. These figures reflect the company's confidence in its growth strategy and market performance."
InvestingPro Insights
In light of UBS's neutral stance on Steven Madden (NASDAQ:SHOO), the latest data from InvestingPro offers additional context for investors considering the stock. With a market capitalization of approximately $3.31 billion and a P/E ratio of 18.34, Steven Madden is positioned as a significant player in the fashion footwear industry. Notably, the company's P/E ratio has adjusted slightly to 17.61 over the last twelve months as of Q1 2024, indicating a modest change in valuation.
One of the InvestingPro Tips highlights that Steven Madden holds more cash than debt on its balance sheet, which suggests a solid financial standing that could help weather potential market downturns. Additionally, the company's liquid assets exceed its short-term obligations, further emphasizing its financial health. However, the tip indicating that the stock is trading at a high Price / Book multiple of 4.01 could signal that the stock is priced optimistically relative to its book value.
Investors should note that while analysts predict the company will be profitable this year, with a robust return on assets of 14.49% over the last twelve months as of Q1 2024, the stock is trading near its 52-week high, which might limit the upside potential in the near term. For those interested in further analysis, there are additional InvestingPro Tips available at: https://www.investing.com/pro/SHOO. To access these tips and more detailed metrics, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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