Jefferies Downgrades Steven Madden (SHOO) to Hold

Jefferies downgraded Steven Madden (NASDAQ: SHOO) from Buy to Hold with a price target of $37.00.

Analyst Randal Konik cited:

• Wholesale is approximately 80% of Steve Madden’s business, and with their customers remaining very guarded, buying thinner and closer to need, we are incrementally more cautious on the stock going forward.
• Although Steve Madden’s newly acquired brands (Dolce Vita, Blondo, Betsey Johnson, FREEBIRD, and Superga) are strong, we believe they are too small (only around 8% of the business) to make a material impact on the company at this point in time.
• Given President-elect Donald Trump’s protectionist policies, sourcing from foreign countries, particularly Mexico, may become problematic for SHOO. Their ability to chase into trends and shorten lead times stems from Mexico, and any hindering of SHOO’s ability to swiftly and cheaply accomplish this, could hurt margins.
• SHOO’s valuation has run up a bit in the past year. We think the multiple is approaching a level where most growth expectations are already factored in, and we view the risk/reward relationship as less promising than before.

For an analyst ratings summary and ratings history on Steven Madden click here. For more ratings news on Steven Madden click here.

Shares of Steven Madden closed at $35.75 yesterday.

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