Seaport Research upgraded Crocs Inc. (CROX) to Buy from Neutral. The firm established a new price target of $135 for the footwear maker.
Analysts attribute the upgrade to a significant rise in product demand this spring. The popularity of the company's sandal collection is a primary driver of this growth. Additionally, demand for the Heydude brand appears to be stabilizing after a period of weakness.
The $135 price target represents a cash-adjusted forward price-to-earnings ratio of 10 times. This valuation is consistent with the company's one-year average.
However, some analysts remain cautious due to disappointing revenue growth over the past two years. Recent investments have also resulted in eroding returns on capital.