Piper Sandler moved Crocs to an Overweight rating from Neutral and raised its price target to $150 from $95, citing a combination of demand improvement in North America, early evidence that wholesale orders are stabilizing, and what it views as a more appealing valuation on a forward basis.
The brokerage highlighted that Crocs' North America direct-to-consumer business returned to mid-single-digit growth in the first quarter of 2026 - the company's strongest DTC performance since the second quarter of 2024. Piper also flagged encouraging signs from the Heydude brand, which the firm says is showing a recovery.
Piper noted Crocs has outperformed consensus profitability expectations in recent quarters, exceeding consensus earnings by an average of 14% over the past four quarters. That track record contributes to the brokerage's view that the company's earnings estimates remain biased to the upside.
Product development and marketing engagement were cited as tangible supports for the outlook. New launches such as the Classic Ballet clog and the Saturday sandal, together with brand collaborations, have driven stronger demand, the firm said. Piper emphasized Heydude's momentum with male consumers and improved performance on TikTok and on Heydude's own website as further evidence of the brand's recovery.
The broker singled out social commerce as an expanding channel for the Crocs brand. It projects TikTok will account for about 3% of Crocs brand sales in 2026, up from roughly 2% in 2025. Piper quantified the impact of that shift as contributing around two percentage points to DTC growth and about one percentage point to total company growth.
Improving online demand, the firm added, appears to be beginning to underpin wholesale orders in North America after a prolonged downturn. That prospective support for wholesale comes alongside promotional discipline and supply-chain improvements.
Piper acknowledged near-term margin pressure related to tariffs in the second quarter, but said the effects should be at least partially offset by stronger markdown discipline, supply chain efficiencies and roughly $100 million of incremental cost savings the company is pursuing. The brokerage also pointed to an ongoing share repurchase program as additional support for earnings and margin expansion.
On the earnings front, Piper forecasts earnings per share of $13.90 for 2026 and $15.24 for 2027. The firm noted that under a bullish scenario the company could approach its 2027 earnings estimate as early as this year. Despite a recent rebound in the stock, Piper described valuation as attractive at around eight times forward earnings.
Key developments summarized:
- Piper Sandler upgraded Crocs to Overweight and increased its price target to $150 from $95.
- North America DTC returned to mid-single-digit growth in Q1 2026, strongest since Q2 2024; Heydude showing recovery.
- Broker projects TikTok will make up about 3% of brand sales in 2026, up from about 2% in 2025, contributing to DTC and company growth.
Financial outlook and considerations:
- Piper forecasts EPS of $13.90 for 2026 and $15.24 for 2027, and highlights the potential for upside versus consensus given recent beat history.
- Approximately $100 million in incremental cost savings and share repurchases are expected to support margins and earnings.
- Tariff-related gross margin pressure is expected in the second quarter, partially offset by markdown discipline and supply-chain efficiencies.