Bank of America Securities analysts have reaffirmed their confidence in Crocs (CROX, Financial), highlighting the company's strong profit margin defenses. They believe Crocs can still achieve its earnings per share (EPS) target of $13 for the year. Since the release of its first-quarter results in May, Crocs' stock price has fallen 14% from its peak. Analysts suggest this decline already reflects the cautious outlook for the U.S. wholesale market.
Despite the confidence in achieving the EPS target, analysts note that additional tariffs and a worsening wholesale outlook are new negative factors compared to the beginning of the year. They maintain a buy rating for Crocs, citing a valuation of 7.5 times the price-to-earnings ratio. With projected sales growth in the low to mid-single digits over the next 2-3 years and an operating margin of 22.5-23%, the current stock price appears undervalued.