Loop Capital cuts Caleres target with hold rating By Investing.com

Loop Capital revised its price target on shares of Caleres (NYSE:), a footwear company, reducing it to $30.00 from the previous $45.00. Despite the change, the firm maintained its Hold rating on the stock. The adjustment follows Caleres’ report of lower-than-expected sales and earnings for the third fiscal quarter.

The firm’s analyst cited several reasons for the reduced price target, including the company’s recent performance and future market challenges. Adjustments were made to estimates to reflect the lowered guidance provided by Caleres.

Concerns were raised about the potential impact of the election news cycle and a shorter holiday shopping period due to five fewer days between Thanksgiving and Christmas.

The analyst also expressed worry about the company’s department store and shoe store customers placing more cautious wholesale orders. These customers are reportedly losing market share to off-price retailers.

Furthermore, there was skepticism regarding the sustainability of the recent resurgence in the company’s Famous Footwear brand, which may have been driven by increased buy-one-get-one promotions.

Loop Capital also slashed its earnings per share (EPS) estimate for fiscal year 2025 by $1.18, indicating a significant adjustment from the consensus outlook, which was previously 38 cents higher than the firm’s new estimate.

Despite the lowered price target and concerns, the analyst noted that Caleres still trades at an attractive valuation, with 7 times the firm’s 2025 EPS estimate and 6 times enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA).

InvestingPro Insights

As we delve into the current financial landscape of Caleres (NYSE:CAL), InvestingPro data reveals a market capitalization of $1.06 billion, underscoring the company’s position in the industry. The stock’s P/E ratio stands at a modest 8.06, which could be appealing to value investors looking for potentially undervalued opportunities. Furthermore, with a price-to-book ratio of 1.75 as of the last twelve months leading up to Q2 2025, Caleres presents an intriguing balance between its market valuation and its net asset value.

InvestingPro Tips suggest that Caleres’ stock may be in oversold territory, as indicated by the Relative Strength Index (RSI). This could hint at a potential upswing if market sentiment shifts. Additionally, the company has demonstrated a robust commitment to shareholder returns, maintaining dividend payments for 54 consecutive years. This consistency is a testament to the company’s financial resilience and could be a reassuring factor for long-term investors. For those interested in a deeper analysis, more InvestingPro Tips are available, providing a comprehensive outlook on the stock’s future.

It’s worth noting that analysts predict Caleres will be profitable this year, which aligns with the company’s positive performance over the last twelve months. This profitability, coupled with the stock’s recent price movements, may offer a strategic entry point for investors. Caleres’ next earnings date is set for November 19, 2024, which will be a critical moment for investors to assess the company’s trajectory and potential for recovery.

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