Deckers Outdoor Stock Rises After Jefferies Upgrade to Buy on Growth Outlook

Deckers Outdoor Corporation (NYSE:DECK) shares gained 3.5% on Monday after analysts at Jefferies upgraded the stock to Buy from Hold, citing increased confidence in the footwear company's ability to deliver sustained growth and stable profit margins.

Jefferies Cites Durable Growth and Valuation

Jefferies raised its price target on Deckers shares to $130 from a previous $110. Analyst Blake Anderson pointed to the company's medium-term guidance, provided during its fourth-quarter earnings call, as a significant factor in the more optimistic outlook.

According to the Jefferies note, management's ability to project durable growth while maintaining profitability addresses previous investor concerns about potential margin compression. The firm highlighted Deckers' guidance, which includes:

• High-single-digit revenue growth
• Stable operating margins in the low-20% range
• Low-double-digit earnings per share (EPS) growth, aided by share buybacks

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Anderson noted that while the forecast for earnings before interest and taxes (EBIT) growth has slowed to high-single-digits from a ~20% compound annual growth rate over the past six years, this appears reflected in the stock's valuation. The company's price-to-earnings ratio has declined from 33x to approximately 13x.

Broader Analyst Confidence

The upgrade from Jefferies aligns with other positive sentiment on Wall Street. Analysts at Stifel recently reiterated a Buy rating on Deckers with a $144 price target. Stifel analyst Peter McGoldrick expects upside to financial estimates and a modest increase to the company's fiscal 2027 guidance.

Stifel's thesis highlights the continued momentum of the HOKA brand, particularly with the launch of the Clifton 11 and Clifton Pro models at higher average selling prices. The firm sees Deckers' gross margin outlook as conservative, suggesting a potential upside of $50 million to $100 million as the fiscal year progresses.