Citigroup upgrades Steven Madden to Buy, raises price target to $32.

Citigroup upgrades Steven Madden to Buy, raises price target to $32.

Title: Citigroup Upgrades Steven Madden to Buy, Raises Price Target to $32

Citigroup has upgraded Steven Madden (SHOO) to a Buy rating, raising its price target to $32 from the previous $26 [1]. The upgrade comes ahead of the company's Q2 report scheduled for July 30. Citi believes that the Q2 will mark the low point for Steven Madden's margins due to significant tariff pressure. However, the firm expects a favorable risk/reward profile as the company's margins are anticipated to recover and fashion trends shift in favor of dress shoes.

Citi's upgrade is based on several key factors. The firm expects the footwear company's second-quarter earnings to mark the low point for margins amid tariff pressure. The company's gross profit margin remains strong at 41.1%, and Citi projects that gross margins will exceed 40% in fiscal 2026, representing a 100 basis point year-over-year improvement. Additionally, Citi forecasts fiscal 2026 earnings per share of at least $2.15, significantly above the consensus estimate of $1.84 [2].

The research firm also believes the market is underappreciating the benefits of the KG acquisition, which Citi expects will contribute to a 12% revenue increase in fiscal 2026 compared to the consensus estimate of 7% growth. Furthermore, a favorable shift in fashion trends toward dress shoes and away from sneakers is expected to benefit Steven Madden's core business. The company has already demonstrated strong revenue growth of 10.3% over the last twelve months [2].

Despite the positive outlook, analysts highlighted ongoing uncertainties related to tariffs and their potential impact on the company's financials. Management expressed optimism about recovering margins in the future, particularly by 2026. These updates reflect a mix of cautious optimism and strategic adjustments as Steven Madden navigates current market conditions [2].

Steven Madden's stock is currently trading at approximately $24.58, with a fair value estimate of $27.63, suggesting a potential upside of 12.39% [4]. The company maintains strong liquidity with a current ratio of 2.25, indicating robust financial health despite recent market pressures [2].

Other recent analyst updates include BTIG reiterating its Buy rating with a $38.00 price target, Williams Trading upgrading the stock from Hold to Buy with a $31.00 target, and Piper Sandler maintaining a Neutral rating with a $25.00 price target [2]. These developments reflect a mix of cautious optimism and strategic adjustments as Steven Madden navigates current market conditions.

References
[1] https://www.tipranks.com/news/the-fly/steven-madden-upgraded-to-buy-from-neutral-at-citi-thefly
[2] https://www.investing.com/news/analyst-ratings/citi-upgrades-steven-madden-stock-to-buy-on-margin-recovery-and-kg-acquisition-93CH-4139220
[3] https://www.theglobeandmail.com/investing/markets/stocks/C/pressreleases/33453665/citigroup-reports-strong-q2-2025-earnings-growth/
[4] https://www.investing.com/equities/steven-madden