Goldman and BofA differed in their recommendations on Crocs. Buy or sell shares?

A Goldman Sachs analyst began coverage of shares of colorful sandal maker Crocs with a «sell» recommendation. He believes that the company will find it difficult to maintain its position in the increasingly competitive market for athletic footwear. A Bank of America analyst disagrees: the day before, he reiterated his advice to buy Crocs securities and expects them to grow by another quarter.

Goldman Sachs initiated coverage of Crocs shares immediately with arecommendation of «sell» and a target price of $88, which is 18% below the last close. The bank analyst cited the company's slowing growth and pointed out that the athletic footwear and apparel market is becoming increasingly competitive. Despite the benefits of health trends and frequent shoe changes, sneaker fashion shifts and aggressive promotions are preventing brands from holding prices, Goldman Sachs said. «While we are positive on Crocs' unique marketing and innovation capabilities, we see a risk of normalizing demand for the company's classic sabots, which we believe will dampen growth in the domestic market and limit the speed of international expansion,» the analyst said in a note thatis cited by CNBC. An additional constraint remains the difficulties in developing the Heydude subsidiary brand, Goldman emphasized.

A Bank of America analyst believes that Crocs still has a lot of strengths even though the company's CEO himself said at a conference call in June that «almost everyone» in the U.S. already has a pair of sabots and that the segment is «already well covered.» BofA reiterated a «buy» recommendation on Crocs shares, but lowered its target price from $140 to $135, suggesting a potential upside of 26% relative to current quotes. «We believe the main growth drivers will remain Western Europe, China and India, where Crocs' share is still less than 2% (excluding the UK),» the bank's analysts said. - In India, additional potential is created by a growing middle class and the establishment of logistics, which allows Crocs to better meet demand».

China remains the fastest growing market, now accounting for about 6% of the brand's sales, MarketWatch notes. Despite macroeconomic risks, Crocs management is confident of further growth in the region. BofA believes that the company's competitive advantages are affordable prices, personalization of footwear with Jibbitz jewelry and reliance on digital channels. The bank lowered its forecast for demand for Crocs' classic models and the Heydude brand at North American chain retailers. However, in direct-to-consumer sales (through stores and online), analysts still expect modest but steady growth that will more accurately reflect the health of the brand.

In trading on July 2, Crocs' share price was almost unchanged. Over the past 12 months, the company's market capitalization has declined by more than a quarter, but since the beginning of 2025, the rate of decline has slowed and the securities have lost about 3%. U.S. consumers and retailers continue to fear inflation and duties, MarketWatch explains this result.

The vast majority of analysts - 11 out of 17 analysts, who gave ratings to the company's shares - advise to buy them (Buy and Overweight ratings). Another five hold a neutral stance and only one suggests getting rid of Crocs securities. The Wall Street consensus target price is $123 and implies a 15% upside to the market value.

This article was AI-translated and verified by a human editor