Why Steven Madden Shares Are Back in Style
5 min readThese reports, excerpted and edited by Barron’s, were issued recently by investment and research firms. The reports are a sampling of analysts’ thinking; they should not be considered the views or recommendations of Barron’s. Some of the reports’ issuers have provided, or hope to provide, investment-banking or other services to the companies being analyzed.
Steven Madden [a maker of shoes and apparel] reported first-quarter adjusted earnings of 33 cents a share, versus our and the consensus estimates of 23 cents/17 cents, on revenue that was up 0.5%. Retail sales were up 27.6%, while wholesale was down 3.7% on a 7.8% decline in wholesale footwear but a 10.3% increase in wholesale accessories.
Management noted that sales continued to accelerate into April, which we believe is a sign that consumers are returning to fashionable footwear; management noted that dressy styles are trending positive. We believe that there’s significant opportunity in the remainder of the year to see upside, as consumers return to pre-Covid activities in force. We raise our price target on the stock from $44 to $46.
Dana
DAN-NYSE
Outperform Price $27.71 on April 28
by Oppenheimer
Dana shares were flattish intraday on Wednesday after [the manufacturer of vehicle components, particularly drivelines] reported first-quarter results that topped the top/bottom line consensus estimates. Dana reported first-quarter adjusted earnings of 66 cents a share, above the consensus estimate of 47 cents. Dana also raised its fiscal-year 2021 guidance, with an earnings-per-share midpoint 5% above the Street’s forecast.
Amid a cyclical upswing across Dana’s end markets, the revised guidance maintains a degree of conservatism on back-half assumptions, including the chip shortage’s impact on light-vehicle production. While commodities (steel, aluminum) and supply-chain costs are driving incremental margin pressure, sequential improvement should mitigate these factors. Investments in electric-vehicle manufacturing appear bullish for future activity. We raise our fiscal 2021-22 estimates and increase our price target [from $27] to $30.
Pinterest
PINS-NYSE
Buy Price $77.58 on April 27
by UBS Global Research
[Shopping and digital-media company] Pinterest’s first-quarter earnings and forward commentary painted a tale of two stories: a solid first-quarter report and second-quarter revenue guidance amid a strong digital-ad backdrop versus potential near-term user growth/engagement headwinds as Covid-19 restrictions ease.
Despite this potential short-term volatility, management remains focused on positioning the business for long-term value creation. Overall, we see Pinterest in the early innings of executing against a broad set of opportunities across a few key industry themes, including the offline-to-online shift in ad spending and blurring of lines between digital ads and e-commerce. We reiterate our Buy rating and price target of $100.
Avangrid AG
R-NYSE
Neutral Price $50.29 on April 28
by Mizuho Securities
We initiate coverage of Avangrid with a Neutral rating and $52 price target. The company [which runs electric and natural-gas networks in New York and New England and has renewable-energy facilities in 22 states] has struggled to meet previously set guidance over the past few years in both its regulated and unregulated businesses, but has recently moved forward with a new CEO and revised EPS targets.
We believe that Avangrid’s robust renewables segment (15% of EPS) is appropriately reflected in its premium price/earnings ratio. We consider the stock fairly valued, as the company needs to establish a pattern of delivering results in line with expectations. [The company’s first-quarter earnings call is scheduled for May 4.]
ServiceNow
NOW-NYSE
Outperform Price $557.24 on April 29
by Macquarie Research
ServiceNow reported a better first quarter and improved future guidance on a constant-currency basis. But noise from foreign-exchange effects resulted in optics of lowered guidance, decelerating business, and steepening seasonality. This and other dynamics generated confusion about the [software] company’s metrics, [pushing down the stock]. We are buyers on weakness and remain confident in ServiceNow’s ability to execute as the best-of-breed workflow-automation platform. Our 12-month price target is $631.
Under Armour
UA-NYSE
Outperform Price $24.03 on April 28
by Cowen
We are raising out price target to $30 [from $27], 24 times our fiscal-2022 estimate of earnings before interest, taxes, depreciation, and amortization, and 52 times our fiscal-year 2022 EPS estimate. Our model suggests north of $1 in EPS potential by fiscal 2024, with free cash flow approaching a sustainable $400 million run rate. Google Search trend data for Under Armour accelerated into April, increasing above comparable 2019 levels. [Under Armour is scheduled to report quarterly results on May 4.]
Coinbase
Global COIN-Nasdaq
Buy Price $294.77 on April 29
by BTIG
Coinbase Global [which specializes in cryptocurrency trading] has agreed to acquire skew, a provider of real-time data visualization and analytics. Terms of the acquisition, which is expected to close in the second quarter, weren’t disclosed. The addition of skew will round out Coinbase’s institutional prime brokerage platform, which includes such offerings as custody, OTC trading, and staking. We believe that Coinbase Prime, which launched in January, has been overlooked by many investors, but has significant upside as institutional adoption of crypto increases.
We estimate that Coinbase’s subscription and services revenue will grow by about 30% annually from 2021 to 2025. The company had $122 billion of institutional assets as of March 31, which was more than half of the $223 billion in total assets on its platform as of that date. Coinbase has approximately 7,000 institutional clients, and skew will enable them to track the crypto spot and derivatives markets in real time. Our price target is $500.
LyondellBasell
LYB-NYSE
Overweight Price $107.49 on April 28
by Alembic Advisors
LyondellBasell announced first-quarter results this morning: Ebitda of $1.59 billion handily beat the consensus estimate of $1.47 billion; reported earnings of $3.18 a share exceeded the consensus estimate of $2.59. Lyondell [a plastics, chemicals, and refining company] plans to operate at nearly full capacity worldwide to meet robust demand, which management expects to persist due to low inventories and maintenance downtime across its industry. Lyondell stated that strong North American integrated polyethylene margins are anticipated to continue as U.S. producers seek to fulfill domestic order backlogs, rebuild inventories, and meet export demand.
To reach a 12-month target price for the stock, we provide three valuation scenarios. Our trough case assumes depressed Ebitda [as in 2009, after the 2008-09 recession] of $2.5 billion. It generates a $31 a share valuation. Our base case assumes our 2021 Ebitda estimate [$5.76 billion], which generates a $120 target. Our bull case utilizes a peak-cycle Ebitda estimate of $11.72 billion. It generates a valuation of $286 a share, highlighting Lyondell’s upside potential.
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