Raymond James analyst Rick Patel upgraded the rating on the shares of Crocs Inc
The analyst models CROX's FY23 revenue at 10.3% growth, in line with the street view.
The analyst raised FY24 revenue estimation to +4% from +3% to reflect stronger momentum continuing at Crocs versus the street view of +4.5%.
When considering the range of FY24 growth outcomes possible for Crocs and HEYDUDE, the analyst believes the estimates are achievable and likely beatable.
The analyst writes that Crocs has strong momentum through international, product diversification and brand heat.
The analyst says that HEYDUDE demand has been way lower than CROX expected entering 2023, but it's important to note that weak Wholesale sell-in is partly a function of industry headwinds.
According to the analyst, HEYDUDE growth will stabilize midyear, returning to growth in 2H24 on easy comparisons.
The analyst says that the stock being higher since the Q3 earnings show how low the bar was for CROX and sees further upside ahead.
The analyst believes street FY24 estimates reflect the low-end of likely revenue outcomes for Crocs and HEYDUDE, and operating margin estimates also already embed pressure from slower revenue and SG&A deleverage.
The analyst expects 2024 total revenue growth to be around 5.5-6% and achieve an EPS of $12.65+ in FY24.
Price Action: CROX shares are trading higher by 4.51% at $100.50 on the last check Tuesday.
