Maxim Initiates Coverage on Fossil with Buy Rating and $5 Price Target

Maxim Group has initiated coverage of Fossil (FOSL) with a Buy rating and a $5 price target.

Maxim Group has initiated coverage of Fossil Group (FOSL) with a Buy rating and a $5 price target. The move comes as the global watch and accessories company seeks to strengthen its position in the market following recent strategic changes. The analyst, Thomas Forte at Maxim Group, has set a price target of $5.00 USD for Fossil Group, reflecting a positive outlook for the stock [2].

The company, valued at $79.4 million, has shown significant volatility with an 11.3% gain in the past week. Fossil Group is implementing a multi-year recovery plan following a leadership change in 2024, with a focus on refocusing on core analog watches, cutting $100 million in SG&A expenses, and strengthening the balance sheet [3].

Maxim Group expects Fossil’s sales to reach their lowest point in 2026 before returning to growth in 2027, with projected sales of $800 million, mid-to-high single-digit operating margins, and positive free cash flow. The firm highlighted Fossil’s portfolio of owned and licensed brands, including Diesel, Michael Kors, and Armani Exchange [3].

As of March 31, 2025, Fossil reported $78.3 million in cash and $179.5 million in debt, including $150 million in senior notes due in November 2026. Maxim Group noted that a capital raise will likely be necessary to address the maturing debt [3].

The $5 price target represents an enterprise value-to-sales multiple of 0.5x, in line with Fossil’s peers, compared to its current trading multiple of 0.2x based on 2026 estimates. Maxim Group is currently the only sell-side firm covering the stock [3].

Fossil Group Inc. reported its first-quarter 2025 earnings, revealing a decline in net sales to $239 million, a 6% decrease in constant currency. Despite these challenges, the company succeeded in expanding its gross margin by 880 basis points to 61.1% and improved its adjusted operating income from a loss of $20 million to a profit of $10 million. The company plans to close 50 additional stores in 2025 as part of its strategic initiatives [3].

Investors and market watchers will likely keep a close eye on the company's performance following this endorsement by Maxim Group. The stock has a current ratio of 1.84, a quick ratio of 1.14, and a debt-to-equity ratio of 1.34. The business's 50-day moving average is $1.34, and its two-hundred-day moving average is $1.45. The stock has a market capitalization of $79.37 million, a price-to-earnings ratio of -0.82, and a beta of 2.44 [4].

References:
[1] https://finance.yahoo.com/quote/FOSL/
[2] https://www.gurufocus.com/news/2955510/fossil-group-fosl-gains-buy-rating-as-maxim-group-initiates-coverage-fosl-stock-news
[3] https://www.investing.com/news/analyst-ratings/maxim-group-initiates-fossil-stock-with-buy-rating-on-turnaround-potential-93CH-4119383
[4] https://www.marketbeat.com/instant-alerts/fossil-group-nasdaqfosl-coverage-initiated-at-maxim-group-2025-07-01/