Susquehanna Upgrades Wolverine World Wide Ahead Of New Product Launches

Wolverine World Wide Inc (NYSE: WWW)’s product offerings planned for 2019 could significantly elevate growth, according to Susquehanna.

The Analyst

Susquehanna’s Sam Poser upgraded Wolverine World Wide from Neutral to Positive and raised the price target from $29 to $41.

The Thesis

Updated product offerings from the Merrell brand that are scheduled for a 2019 release could “significantly accelerate” growth in fiscal 2019 and push results above consensus, Poser said in a Wednesday note. (See the analyst's track record here.) 

“We believe the new Spring '19 Merrell product is not only compelling, but importantly, sticks to the DNA of the Merrell brand," the analyst said. 

Merrell will be launching three collections: The Jungle Moc XX, The Hydro Moc and Hydro Slide The Range Collection.

The Jungle Moc XX will be a relaunch of Merrell’s classic moc design, paying homage to the original product with some new updated features. Poser said he expects this product to be a key driver of sales growth in 2019.

“The new Jungle Moc (knitted and lace-up) builds upon Jungle Moc's success and we expect the version to reignite sales.”

Poser additionally said that clean inventories, process improvements and a “more flexible” model should limit risk to fiscal 2018 EPS guidance.

Price Action

Wolverine World Wide shares were down 0.51 percent at $35.20 at the time of publication Wednesday. 

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