What Happened?
Shares of shoe and apparel company Steven Madden (NASDAQ: SHOO) jumped 5.4% in the afternoon session after analysts at Citigroup moved the stock to "Buy" from "Neutral" and raised their price target.
Citigroup boosted its price target on the footwear and accessories company to $32 from $26, suggesting a potential 30% upside from its previous close. The upgrade is based on the belief that the company's profit margins are set to recover. Analysts at the firm anticipate that the second quarter of 2025 will represent the low point for margins, which have been under pressure from significant tariffs on goods from China. Citi expressed optimism for margin improvement in 2026 and also noted that the market may be underappreciating the benefits of the company's acquisition of Kurt Geiger. Furthermore, the bank sees a favorable shift in fashion trends away from sneakers and toward dress shoes, which should benefit Steven Madden's core business.
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What Is The Market Telling Us
Steven Madden’s shares are quite volatile and have had 16 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 biggest move we wrote about over the last year was 2 months ago when the stock gained 16.7% on the news that the company reported decent first quarter 2025 results with EBITDA and EPS beating Wall Street's estimates, though sales missed by a whisker. What stood out was how the company kept profits steady, even though sales barely grew from last year. While the company pulled its full-year forecast due to new tariffs, it still sounds upbeat about the rest of the year. It also just closed a deal to buy Kurt Geiger, which should help drive new sales. Zooming out, we think this quarter was good.
Steven Madden is down 38.4% since the beginning of the year, and at $25.88 per share, it is trading 47.9% below its 52-week high of $49.70 from September 2024. Investors who bought $1,000 worth of Steven Madden’s shares 5 years ago would now be looking at an investment worth $1,157.
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