Piper Jaffray Slashes Price Target on Crocs to $44 (CROX)

Piper Jaffray lowers its price target on Crocs (Nasdaq: CROX) from $67 to $44 and maintains a Buy rating.

The firm said it lowered its earnings estimates on Crocs due to March retail sales that were "below even conservative expectations." Piper, who has been a consistent defender of Crocs on its decline from $75 to under $20, cites a "lack of traffic & cooler than average weather to blame."

Piper believes that Crocs' international business will be the growth driver throughout 2008, and expects growth in this segment to reach 50%. Additionally, the firm says, "execution, balancing sales with inventory and capacity utilization, and benchmarking near-term sales fluctuations against long-term category demand are all increasingly important to stock price appreciation potential over the next 12-months."

The firm lowered its FY08 and FY09 EPS estimates on Crocs from $2.70 to $2.50 and from $3.23 to $3.09, respectively. The Street's estimates are currently $2.67 for FY08 and $3.21 for FY09.

Piper also lowered the Company's price target multiple from 25x to 17.5x its FY08 EPS estimate. The firm said this multiple represents "the mid-point of what we believe to be Crocs' long-term sustainable EPS growth rate of 15-20%."

Piper's new price target on Crocs represents a potential gain of about 130% from its current price of $18.55.

Crocs, Inc. and its subsidiaries design, develop, and manufacture consumer products from specialty resins worldwide. [BCS]

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