Wolverine World Wide: Hold Rating Maintained Amid Balance Sheet Risks Despite Q1 Over-Delivery

Analyst Jim Duffy of Stifel Nicolaus maintained a Hold rating on Wolverine World Wide (WWW – Research Report), boosting the price target to $11.00.

Jim Duffy has given his Hold rating due to a combination of factors including Wolverine World Wide’s first quarter performance and the company’s balance sheet risks. Despite the company’s adjusted revenue and earnings per share for the first quarter exceeding Stifel’s and consensus estimates, there remain concerns about revenue visibility due to ongoing restructuring efforts. Furthermore, the year-over-year declines in revenue were anticipated and align with the company’s strategic plan, and the over-delivery in the first quarter relative to guidance is a positive indication of the company’s operational execution.
However, the valuation remains sensitive due to the balance sheet risks, particularly the high net leverage which is projected to improve by year-end. Duffy also highlights that compared to other companies in the industry that are similarly or less valued, Wolverine World Wide does not provide adequate compensation for these risks. As a result, despite increasing the target price to reflect the company’s solid execution, the Hold rating reflects a cautious stance on the stock within the context of its sector.

According to TipRanks, Duffy is a 5-star analyst with an average return of 8.1% and a 55.94% success rate. Duffy covers the Consumer Cyclical sector, focusing on stocks such as Fox Factory Holding, Crocs, and Clarus.

In another report released today, Telsey Advisory also maintained a Hold rating on the stock with a $9.00 price target.

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Wolverine World Wide (WWW) Company Description:

Wolverine World Wide, Inc. engages in the design, manufacture and sale of branded casual, active lifestyle, work, outdoor sport, athletic, children’s and uniform footwear and apparel. It operates through the following segments: Wolverine Michigan Group and Wolverine Boston Group. The Wolverine Michigan Group consists of Merrell footwear and apparel, Cat footwear, Wolverine footwear and apparel, Chaco footwear, Hush Puppies footwear and apparel, Bates uniform footwear, Harley-Davidson footwear and Hytest safety footwear. The Wolverine Boston Group consists of Sperry footwear and apparel, Saucony footwear and apparel, Keds footwear and apparel, and the Kids footwear business, which includes the Stride Rite licensed business, as well as kids’ footwear offerings from Saucony, Sperry, Keds, Merrell, Hush Puppies and Cat. The company was founded by G. A. Krause in 1883 and is headquartered in Rockford, MI.