BofA Securities analyst Christopher Nardone reiterated the Buy rating on Crocs, Inc
The company said it will discuss the results of its third quarter on Tuesday, October 29. Nardone cites an attractive risk/reward for the stock that is pegged at a 10x P/E ratio.
The analyst projects third-quarter earnings per share (EPS) of $3.17, slightly exceeding the guidance range of $2.95 to $3.10 and 2% above consensus estimates.
This forecast includes a 5.8% growth in Crocs sales, surpassing the guidance of 3% to 5%, driven by strong international performance, while Heydude sales are expected to decline by 15%, in line with guidance.
Nardone writes attention will be focused this quarter on trends in North America and whether the shift to direct-to-consumer (DTC) sales following the Amazon.com, Inc.
Confirmation that North America sales are stable or modestly higher would alleviate concerns regarding what the analyst considers the main debate surrounding the stock.
In previous years, Crocs has adjusted its sales outlook upward (three times) and its margins (twice) in January compared to the initial fourth-quarter guidance.
The analyst forecasts another conservative forecast, projecting fourth-quarter earnings per share of $2.66, which would raise the fiscal 2024 EPS estimate to $12.86, aligning with the high end of the guidance range.
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Price Action: CROX shares are trading higher by 1.72% to $138.43 at last check Friday.
