Sterne Agee Reiterates Skechers Sell, $16 PT (SKX)

Sterne Agee reiterated its Skechers SKX Sell rating and $16 price target in a research report published today. In the report, Sterne Agee states, "While we believe there is value in the core SKX franchise, rapidly diminishing toning margins and an inappropriately sized cost structure are likely to obfuscate this over the next 6-9 months. In our view, margins are unlikely to inflect until 3Q when excess inventory has been liquidated and new toning product is cost engineered to support normalized margins at a $65-70 price point. Until we see stabilization in ASPs at retail, we believe that there remains risk to numbers in 1H11 and continued downside in the stock." Shares of Skechers were trading at $22.59 at the time of posting, up 2.36% from Wednesday's market close.