Deckers Receives an Upgrade as Selloff Creates a Valuation Entry Point

Deckers Outdoor NYSE:DECK, the maker of UGG and Hoka footwear, rose 1.42% intraday after Jefferies upgraded the stock to Buy from Hold and raised its price target to $130 from $110. The upgrade follows management discussions at Jefferies' recent Nantucket conference, where the firm said it gained greater appreciation for Deckers' ability to sustain multi-year growth while maintaining flat margins. Medium-term guidance calls for high-single-digit revenue growth, stable operating margins in the low-20% range, and low-double-digit EPS growth supported by buybacks.

Jefferies acknowledged that EBIT growth is expected to slow to roughly high-single-digit percentage, down from a roughly 20% CAGR over the past six years. But the firm argued the deceleration is already reflected in the valuation, with the P/E multiple compressed from 33x to 13x, addressing prior concerns about margin compression and growth sustainability.

Deckers shares are down 50% since its peak in January 2025, a decline Jefferies views as having created a valuation entry point ahead of the company's next earnings report on July 23.