Shares of Crocs, Inc. (NASDAQ:CROX) are rising Thursday despite a downgrade from Keybanc. Here’s what investors need to know.
Keybanc Downgrades CROX To Sector Weight
KeyBanc Capital Markets analyst Ashley Owens provided an update on the footwear company and the broader internet retail market on Wednesday, predicting a year of selective consumer spending and emphasizing the importance of execution, product innovation, and pricing discipline.
Owens said the stock remains under pressure as CROX works through a deliberate pullback in promotions and tighter wholesale receipts in North America. U.S. demand remains challenged, with management citing a more "choiceful consumer," coupled with competition in the sub-$100 category as athletic brands lean back into value.
While international could remain a bright spot, visibility remains limited given ongoing wholesale caution and tariff headwinds. Owens revised the yearly estimates downward, with the most pronounced impact in the first half.
“We now expect further pressure on top-line trends as promotional restraint, caution on wholesale, and consumer selectivity persist,” the analyst said.
Although valuation looks inexpensive and the balance sheet flexibility remains a positive for the company, the firm sees limited catalysts in the near term and prefers to remain sidelined until easier comparisons in the second half of the year.
Owens expects sentiment to “remain challenged” until signs of execution begin to materialize.
CROX Shares Are Volatile Thursday
CROX Price Action: Crocs shares initially fell following the downgrade before bouncing back. The stock was up 1.70% at $86.72 at the time of publication on Thursday, according to Benzinga Pro data.
Image: Shutterstock
