Crocs valuation points to attractive 2024 setup - Raymond James

investing.com:

Raymond James analysts upgraded shares of Crocs (NASDAQ:CROX) to Strong Buy from Outperform on Tuesday, raising the price target to $115 from $98 per share.

The analysts also added the stock to Raymond James' «Analyst Current Favorites» list. They said the firm decided to upgrade the stock as its current valuation points to an attractive 2024 setup.

«Since our note on October 20, CROX reported 3Q including a sizable guide down of HEYDUDE, a significant de-risking event,» the analysts said. «The stock being higher since then shows how low the bar was for CROX and we see further upside ahead.»

«We raise estimates slightly upon a further review of our model and believe Street 2024 estimates reflect the low-end of likely revenue outcomes for Crocs and HEYDUDE,» the analysts added. «Operating margin estimates also already embed pressure from slower revenue and SG&A deleverage.»

The firm's scenario analysis shows a range of likely outcomes in 2024, with most signaling upside potential to EPS, the analysts revealed.

«CROX's P/E is still 8x, which we consider highly discounted given our expectation of moderate revenue growth, strong and durable op. margins, and EPS accretion from debt paydown and buybacks,» they concluded.