Benzinga | Sep 21, 2021 03:20PM EDT

Why This Steve Madden Analyst Sees Supply Chain Winner

Steven Madden, Ltd. (NASDAQ:SHOO)'s supply chain expertise and proactiveness in thwarting disruption are even more important in an "unprecedentedly difficult supply chain environment," according to Jefferies.

The Steven Madden Analyst: Janine Stichter upgraded Steven Madden from Hold to Buy and raised the price target from $44 to $50.

The Steven Madden Takeaways: The ability to meet demand provides greater visibility into Steven Madden's performance and enables the company to gain market share, Stichter said in the upgrade note.

Wholesale, which contributes around 70% of Steven Madden's sales, "is now on the verge of inflecting positively vs. '19, given increased appetite for inv. among its retail partners, which are now taking on earlier and larger orders in an attempt to get ahead of supply chain delays," the analyst said.

Retail operating margins are likely to inflect significantly to double-digit percentage positive in 2021, "driven by mix shift to higher margin e-comm, occupancy saves, and reduced promos," she said.

SHOO Price Action: Shares of Steven Madden were trading 3.81% higher at $40.64 Tuesday afternoon.