Bernstein analyst Aneesha Sherman raised her price target for Deckers Outdoor Corp. (NYSE:DECK) to $90.00 from $85.00 but kept an Underperform rating, citing concerns about the durability of U.S. growth for the company’s key brands. The move came after Deckers reported a third quarter that outperformed expectations on both top-line and margin metrics.
Market-value metrics show a mixed picture: InvestingPro data indicates Deckers shares trade at a price-to-earnings ratio of 14.77, which InvestingPro’s Fair Value model flags as low relative to the company’s near-term earnings growth. That valuation signal suggests the stock may be trading below what the model considers fair value.
Deckers’ fiscal third-quarter 2026 results provided the immediate catalyst for recent analyst activity. The company posted earnings per share of $3.33, well above consensus estimates of $2.77. Revenue also surpassed expectations, coming in at $1.96 billion versus the forecast of $1.87 billion. Management data showed sales and gross margins beat the street, and gross profit margin remained strong at 57.66%.
On the brand front, Hoka returned to growth in U.S. direct-to-consumer channels after three straight quarters of decline, while the company recorded 12.62% revenue growth over the last twelve months. Bernstein also noted continued robust international expansion across Deckers’ portfolio, consistent with the firm’s real-time data observations.
Despite the better-than-expected quarter, Bernstein flagged softer guidance for the fourth quarter. Deckers projected no growth for its Ugg brand in Q4 and warned investors about sizable tariff-related pressure on margins. Those elements contributed to Bernstein’s cautious posture even as other analysts adjusted their views upward.
Following the earnings release, several firms revised their outlooks. Needham raised its price target on Deckers to $138.00 and kept a Buy rating. Evercore ISI lifted its target to $108.00 from $90.00, characterizing the quarter as strong. BTIG maintained a Neutral rating while acknowledging balanced growth and improving direct-to-consumer trends for UGG and HOKA. Collectively, these adjustments reflect a broader analyst reaction recognizing Deckers’ ability to address earlier concerns around demand and wholesale ordering patterns.
Bernstein’s reservations center on whether Deckers can sustain U.S. growth for Hoka and Ugg without compromising brand equity. The research firm questioned the sustainability of growth that relies on expanding lower-quality doors or increasing discounting to drive volume. Bernstein said it would shift to a more constructive view if Deckers can demonstrate a credible pathway to sustained, high-quality growth in the U.S., particularly by growing like-for-like without eroding brand positioning.
The juxtaposition of solid quarterly results and cautious forward commentary underscores a common tension in retail and consumer goods analysis: current operating momentum versus the quality and sustainability of future growth. For Deckers, the conversation now centers on execution in the U.S. market, tariff management, and the ability to expand without dilution of brand strength.
Contextual takeaways
- Q3 performance supplied clear evidence of demand recovery and margin resilience, reflected in beats on EPS and revenue.
- Analyst reactions diverged: some firms raised price targets substantially while Bernstein maintained an Underperform rating due to forward-looking concerns.
- Valuation metrics from InvestingPro indicate the stock may be undervalued versus near-term earnings growth expectations.
Bottom line
Deckers’ fiscal Q3 2026 results and improved direct-to-consumer traction gave analysts reason to reassess targets, but Bernstein’s retained caution highlights risks tied to U.S. brand growth strategies and tariff-related margin pressure. The company’s next steps on like-for-like growth and channel quality will likely determine whether analysts become more constructive.