Wolverine World Wide Stock To Rebound After An 8% Decline?

by Trefis Team
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Wolverine World Wide’s stock (NYSE: WWW), a designer, manufacturer, and marketer of casual shoes, rugged outdoor, and work footwear, has declined around 8% over the last twenty-one trading days (one month) and currently stands at near $33. It should be noted that the broader S&P500 returned a flat growth during the same period. We expect the company’s stock to continue to decline going forward, based on a stellar revenue and earnings beat in Q2 and a raised full-year guidance. Wolverine World Wide’s operations have recovered to pretty much pre-pandemic levels. The company saw direct-to-consumer revenue grow 69% from the 2019 level. Also, its owned e-commerce revenue was up 91% and owned store revenues grew 19% from the two years ago level. This improved operational performance inspired the company to make a sizable deal with Sweaty Betty, a global fitness and lifestyle brand for women. The acquisition is expected to provide more exposure in the EMEA region and a larger direct-to-consumer and e-commerce angle as well.

Looking ahead, Wolverine World Wide guides for full-year revenue to range between $2.34 billion to $2.40 billion, compared to a prior forecast of $2.24 billion to $2.30 billion. The company also sees EPS to range between $2.20 to $2.30 compared to $1.95 to $2.10 previous estimates. We believe that the company’s stock looks undervalued after this strong performance and could see gains in the near term. Specifically, there is a 51% chance of a rise for WWW stock over the next month (twenty-one trading days) based on our machine learning analysis of trends in the stock price over the last ten years. See our analysis on WWW Stock Chances of Rise for more details.

Calculation of ‘Event Probability’ and ‘Chance of rising’ using last 10 year data

[1] -3.5% or higher return during five-day period in 364 times out of 2517; Stock rose in the next 5 days in 195 of these 364 instances

[2] -9% or higher return during ten-day period in 138 times out of 2516; Stock rose in the next 10 days in 60 of these 138 instances

[3] -8.2% or higher return during twenty-one-day period in 305 times out of 2516; Stock rose in the next 21 days in 155 of these 305 instances

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