Wolverine World Wide’s Price Target From Wedbush Boosted to $41 From $37

Wolverine World Wide (WWW) received a boost to its price target Monday from Wedbush ahead of the footwear-and-apparel company’s Q2 report expected Wednesday.

Wedbush’s new price target on the stock is $41 per share, up from $37. This moves the price target further above the stock’s Friday closing price of $35.91 as Wedbush kept its investment rating on the shares at outperform.

In a note to clients, the firm said the boost to its price target on Wolverine World Wide’s stock came as the target is now based on its estimate for the company’s 2019 earnings per share. “Looking to FY19, there is confidence that WWW can return to overall revenue growth while generating further [operating] margin expansion,” Wedbush said.

For Q2, Wedbush said it expects Wolverine World Wide’s Q2 results to show “generally in-line revenue with modest EPS upside” and reiterated guidance for 2018.

The firm anticipates the company’s two largest brands — Merrell and Sperry — “likely continued to perform, though as expected some of this momentum was offset by ongoing softness in Saucony.” It said these trends are supported by the firm’s social-media engagement data analysis, adding it expects growth at Merrell and Sperry “was driven by new products while Saucony continues to struggle with fit challenges.”

Wedbush added: “In the end, the company continues to produce results through key initiatives (product innovation, supply chain, consumer insights and engagement, digital, international and more) and WWW should see growth from most of its major brands for the year, accelerating into FY19.”

According to Capital IQ, analysts’ mean estimate for Wolverine World Wide’s Q2 adjusted earnings per share is $0.46, up from the year-earlier period’s $0.43. Analysts’ mean estimate for the company’s Q2 revenue is $569.2 million, down from $598.8 million a year earlier.

Wedbush is estimating the company’s Q2 adjusted EPS at $0.46, even with the Street view, while its revenue estimate is $572.8 million, slightly above analysts’ mean estimate.