Hot Stocks: Caleres, Under Armour & Coach

Hilary Rhoda Via Spiga Holiday Shoes
The Tallulah ankle-strap sandal from Hilary Rhoda x Via Spiga.
Courtesy of Via Spiga.

What footwear stocks have Wall Street’s shoe business experts been raving about lately? Here, we round up three buy-rated stocks and the reasons market watchers give each the thumbs-up.

Caleres Inc.

The owner of Famous Footwear and brands such as Sam Edelman, Via Spiga and Dr. Scholl’s continues to be a Wall Street favorite, nabbing buy ratings from Susquehanna Financial Group LLLP analyst Christopher Svezia, CL King & Associates analyst Steve Marotta and Sterne Agee CRT analyst Sam Poser.

Although the firm missed Q1 estimates and lowered its guidance in May, analysts say they remain impressed by management’s ability to navigate a challenging retail environment.

“Overall, despite the tougher environment, we believe management continues taking the right steps to manage the business [i.e., earnings missed due to investing],” Svezia said.

Margin opportunity and an attractive valuation, added Svezia, also make the stock a top pick.

Under Armour Inc.

Although the brand’s stock has seen quite a bit of pullback in recent months, footwear-and-apparel analysts continue to rate Under Armour a worthy buy — particularly for long-term investors.

While Sports Authority’s demise caused the brand to downward adjust its outlook this week, Citi Research analyst Kate McShane, Canaccord Genuity Inc. analyst Camilo Lyon and Poser all maintained or reiterated buy ratings on the stock.

“Based on our checks and data available, we remain very confident that the long-term growth prospects will not be impacted by the short-term woes caused by the liquidation of Sports Authority’s stores,” Poser wrote Wednesday. “The impact of Stephen Curry in the NBA Finals, the recent win on the PGA tour by Jordan Spieth, the upcoming Summer Olympics, which all of North America can watch live on TV for the first time since 1996, and continued accelerated international growth keep Under Armour as a top pick for long-term growth investors.”

Furthermore, with the shares currently trading lower than usual, some analysts have suggested that now is the time to buy the stock at a discount.

Coach Inc.

There may have been some challenges dragging down overall handbag sales in 2015, but Coach’s most recent quarter has shown that the brand is primed for a comeback.

UBS Investment Bank analyst Michael Binetti gives the brand’s stock a buy rating while Cowen and Co. analyst Oliver Chen expects the shares to outperform.

“We believe management is taking the right steps around product, marketing and stores to position the company for renewed growth next year,” Chen wrote on April 26. “We also like [the company’s] operating efficiency initiatives to drive SG&A savings and support targeted goal of 20 percent operating margin.”