What Happened?
Shares of footwear conglomerate Wolverine Worldwide (NYSE: WWW) jumped 3% in the morning session after analyst firm UBS raised its price target on the footwear company to $30 from $22, while maintaining its Buy rating on the stock. The investment firm pointed to expectations of a robust second quarter for the company. This optimism was reportedly fueled by strong momentum from its Saucony brand and solid performance from the Merrell brand. UBS also forecasted that Wolverine would likely exceed consensus earnings per share (EPS) estimates by 4 cents for the quarter.
After the initial pop the shares cooled down to $23.74, up 2.2% from previous close.
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What Is The Market Telling Us
Wolverine Worldwide’s shares are very volatile and have had 25 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock gained 6.7% on the news that an analyst at Williams Trading raised the price target on the stock and the broader consumer retail sector received a boost from positive economic data. Williams Trading increased its price target on the footwear and apparel company to $25.00 from $21.00, maintaining a "Buy" rating. The analyst cited growing momentum in the company's Active Group, which includes the popular Saucony and Merrell brands. The firm noted that Wolverine is shifting to a "pull model" for these brands faster than expected, which improved the company's outlook. The positive sentiment was reinforced by broader economic news that showed consumer spending remained resilient. A recent report from the U.S. Census Bureau indicated that retail sales rose in June, beating economists' expectations. This suggested that shoppers were still willing to spend on discretionary items, a favorable sign for companies like Wolverine that rely on consumer demand for their products.
Wolverine Worldwide is up 5% since the beginning of the year, and at $23.74 per share, it is trading close to its 52-week high of $24.25 from December 2024. Investors who bought $1,000 worth of Wolverine Worldwide’s shares 5 years ago would now be looking at an investment worth $1,008.
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