As Nike stock's latest rebound attempt trips over a bigger-than-expected sales decline, Wolverine World Wide keeps marching higher after clearing a buy point on Sept. 20. WWW stock is taking another big step forward in early Thursday stock market action, helped by an upgrade and price-target hike from Exane BNP Paribas.
The upgrade comes after Wolverine World Wide stock price performance has already overtaken all of its rivals in the Apparel-Shoes & Related Manufacturing industry group, including Dow Jones industrials component Nike, as well as Deckers Outdoor and On Holding.
WWW Vs. NKE, ONON And DECK
Wolverine stock currently sports a 97 Relative Strength rating, according to IBD Stock Checkup, meaning it has outperformed 97% of all stocks over the past 12 months. By comparison, ONON has a 96 RS rating, DECK 87 and NKE 23.
Based on the broader IBD Composite Rating, a single rating that combines fundamental and technical factors, Wolverine World Wide still trails leaders ONON and DECK, ranked No. 8 in the group.
Steven Madden, another company that has flown below the radar, has climbed to No. 3 among shoemakers. Wolverine and Steven Madden both scored breakouts in September, and have clocked the group's best gains over the past month.
A look below the surface explains helps explain why Wolverine sales and earnings have badly lagged the stock's performance.
As Piper Sandler put it, while starting coverage with an overweight rating and 18 price target on Aug. 22, the company has done "the bulk of heavy lifting" over the past two years, divesting noncore assets and overhauling its supply chain. The research firm called Wolverine World Wide's potential as "underappreciated," envisioning mid-single-digit percentage sales growth, and 20% EPS growth as free cash is used to pay down debt and repurchase shares.
Wolverine World Wide's brands include Merrell, Saucony, Sweaty Betty and Wolverine work boots. The company sold off its Keds brand in February 2023, Wolverine Leathers in August 2023 and its Sperry business in January.
The Saucony brand is winning plaudits. GearLab's eight best running shoes of 2024 included two Saucony shoes, based on a test of hundred of shoes. The other six include two Nike racing shoes, two Puma shoes and two from Asics.
After the Q2 earnings report, KeyBanc upgraded WWW to overweight with a 20 price target, saying it is on track to return to growth in Q4.
Exane BNP Paribas gave WWW a 22 price target, while upgrading the stock to outperform from neutral.
WWW Stock
Wolverine World Wide jumped 5.4% to 18.07 early Thursday. After clearing a 15.23 buy point on Sept. 20, WWW is nearing the 20% profit-taking margin, which begins at 18.28.
Steven Madden slipped 1.7%to 48.28 early Thursday, but remains in buy range from a 47.24 buy point.
Nike stock edged fractionally lower, after tumbling 6.8% on Wednesday.
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