Crocs stock has received an upgrade from analysts at Raymond James, who are feeling optimistic about the company’s prospects for next year. The analysts, Rick Patel and Josh Reiss, have upgraded Crocs stock to Strong Buy from Outperform and raised their price target to $115 from $98. They express increasing confidence in the setup for 2024. As a result of this upgrade, Crocs stock has been added to the Analyst Current Favorites list.
Currently, the new price target implies a potential upside of about 14% from the current market price. In Tuesday’s trading, shares were up 4.8% to $100.75. It is worth noting that despite this recent increase, the stock still holds a year-to-date loss of 7%.
When the company announced its third-quarter results on November 2, it lowered growth expectations for its HeyDude brand. This event was considered by Raymond analysts as a significant de-risking event. However, they highlight that the fact that the stock has increased since then indicates the low expectations that were set for CROX. The analysts believe that there is further upside ahead.
According to Dow Jones Market Data, the stock has risen 16% from November 2 to Monday’s close. Even with these gains, Crocs stock still has a price-to-earnings multiple of less than eight times. The analysts at Raymond James consider this to be highly discounted when considering their expectations of moderate revenue growth, strong and durable operating margins, and potential earnings-per-share accretion from debt paydown and buybacks.
In their report, the analysts have revised their earnings, revenue, and operating margin estimates for 2024. They argue that Wall Street’s forecast reflects the low-end of likely revenue outcomes for Crocs’ two brands.
