What Happened?
Shares of shoe and apparel company Steven Madden (NASDAQ: SHOO) jumped 4.8% in the morning session after Piper Sandler upgraded the stock to 'Overweight' from 'Neutral' and significantly raised its price target.
The investment firm boosted its price target on the shares to $40 from a previous $25. The analyst highlighted an expected significant improvement in the company's EBIT margins, which are a measure of a company's profitability. The firm also pointed to a potential earnings power exceeding $4 per share. According to the note, the stock appeared undervalued based on 2026 earnings estimates. This optimistic view from the analyst arrived even as the company had previously faced headwinds from supply-chain issues that pressured its profitability.
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What Is The Market Telling Us
Steven Madden’s shares are very volatile and have had 21 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 11 days ago when the stock gained 4.1% on the news that the latest Consumer Price Index (CPI) report came in largely as expected, reinforcing investor hopes for an upcoming Federal Reserve interest rate cut. Data from the Bureau of Labor Statistics showed headline inflation for August at a 2.9% annual rate, with core inflation, which excludes volatile food and energy prices, holding steady at 3.1%.
Steven Madden is down 19.3% since the beginning of the year, and at $33.86 per share, it is trading 31.9% 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 $1,707.
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