Skechers Is Upgraded by Morgan Stanley After Strong Profit

Skechers soars and Morgan Stanley upgrades the footwear maker after it reports stronger-than-expected earnings.
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Skechers USA  (SKX) - Get Report soared Friday and Morgan Stanley upgraded the footwear maker after it reported stronger-than-expected earnings in the first quarter.

Morgan Stanley analyst Kimberly Greenberger lifted her rating to overweight from equal weight and boosted price target on the stock to $56 from $44.

She was impressed with the earnings and a “clearer” forecast of earnings before interest and taxes and earnings per share.

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Skechers traded Thursday at $51.49, up 16.47%. It has gained 41% in the last three months amid optimism about vaccines and economic recovery.

Skechers posted earnings of $98.6 million, or 63 cents a share, in the first quarter, up from $49.1 million, or 32 cents, a year earlier.

The gain came as Skechers enjoyed rising demand overseas.

Adjusted earnings in the period were 68 cents a share, beating the FactSet analyst consensus of 49 cents.

Revenue climbed 15% to $1.43 billion in the latest quarter from $1.24 billion last year. The analyst consensus called for sales of $1.35 billion in the latest quarter.

“This significant growth is the result of continued demand for Skechers product as consumers desire comfort and quality in their footwear and walking remains a top COVID-19 pandemic activity,” CEO Robert Greenberg said in a statement. “With warmer weather and increased vaccination rates around the world, traffic is improving in many of our retail stores, and our digital business continues to be a very strong growth driver.”

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