NEW YORK (TheStreet) -- Shares of Crocs (CROX) - Get Report are diving by 10.67% to $8.79 on heavy trading volume Wednesday afternoon, after Stifel downgraded the stock to "hold" from "buy." The firm also removed its $14 stock price target.
The firm's analysts said their bullish thesis on the Niwot, CO-based casual footwear maker was based on the company's ability to return to double-digit EBIT margins, according to Barron's.
While they believe Crocs can do this in the long-term, it will be difficult for the company to do so by 2018 because that date requires "aggressive" revenue growth projections, Stifel added.
The firm also warned of a difficult retail environment worldwide, lackluster North America checks this spring and the potential that its Chinese distributor stalemate remains in the second half of the year, Barron's added. This challenges the company's 2016 sales targets.
"Our view remains that expense management is a more deliberate path to improved margins structure and earnings power...We could turn more constructive with either improving visibility to accelerating revenue momentum or heightened focus on expense management," Stifel wrote in a note.
About 1.77 million of the company's shares were traded by this afternoon, well above its average volume of 647,950 shares per day.
Separately, TheStreet Ratings Team has a "Sell" rating with a score of D on the stock.
This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks covered.
The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: CROX