The decline in the shares of the parent company “Hooka” is an opportunity to buy trendy brands, … | kbnmart

With Deckers Outdoor Corp., the parent company of Hoka and Ugg, retreating from all-time highs, now is a good time to buy, according to a Wedbush analyst.

Shares of the shoe company, which Tom Nikic calls “one of the strongest and best-run companies” in his coverage, are down about 20% from their record closing high at the end of May. That’s a significant discount for Nikic, who has an outperform rating and a $1,030 price target on the stock, about 16% above current trading.

“They’ve been very good at developing new products and recognizing that they can’t rest on their laurels,” Nikic said in an interview, adding that Decker’s flagship brands, Hoka and Ugg, “are still popular.”

In the near term, Nikic sees Hoka’s athletic footwear and apparel as the main driver of momentum, as the first quarter is typically a “seasonal low point” for Ugg — widely known for its sheepskin boots. He noted that commentary on the two brands will be key when Deckers reports earnings later this summer, as the company typically delivers its smallest guidance increase of the year in the first quarter.

“The stock’s reaction will be determined more by management’s tone on the two core brands (which we expect to be bullish) than a major change in estimates,” he wrote in a note on Thursday.

But the stock is facing criticism. On Wednesday, Deckers was the worst performer in the S&P 500 after data-driven research firm MScience reported slower growth in June for both Hoka and Aug. Shares fell 0.5% on Thursday, putting the company on track for its worst week since April.

But overall, Wall Street remains largely bullish on the shoemaker, giving the company 16 buy ratings, five hold ratings and two sell ratings, according to data compiled by Bloomberg. Over the past 12 months, the company has been the best performer in the S&P 500 consumer discretionary sector, up more than 60%.