Weyco Group's 15min chart signals bearish momentum with MACD Death Cross and Bearish Marubozu.

According to the 15-minute chart of Weyco Group, a bearish technical indicator known as the MACD Death Cross has been triggered, accompanied by a bearish Marubozu candle at 08/19/2025 11:45. This suggests that the stock price may continue to decline, as sellers are currently in control of the market, and bearish momentum is expected to persist.

Title: Weyco Group: Bearish Signals Emerge as Technical Indicators Suggest Further Decline

Weyco Group's (NASDAQ: WEYS) stock experienced a significant shift in its technical indicators on August 19, 2025, at 11:45, as a bearish MACD Death Cross and a Bearish Marubozu candle appeared on its 15-minute chart. This combination of technical indicators signals a potential continuation of the stock's decline, with sellers currently dominating the market and bearish momentum expected to persist.

The MACD (Moving Average Convergence Divergence) Death Cross occurs when the MACD line crosses below the signal line, indicating a potential trend reversal. The Bearish Marubozu pattern, characterized by a long white candle with no shadows, signifies that sellers are in control, with no visible resistance or support levels [1]. These technical indicators suggest that Weyco Group's stock price may continue to decline, as sellers dominate the market and bearish momentum persists.

Recent Financial Performance and Challenges

Weyco Group's recent performance has been robust, with a +1.85% gain in the latest trading session and an expected earnings growth of +75.23% for the full year. However, the technical indicators suggest a potential slowdown or reversal in the near term. For a more comprehensive analysis, investors should consider the broader market context and other fundamental indicators.

Weyco Group is currently trading at a Forward P/E ratio of 18.12, which is below the industry average of 21.43, indicating a potential discount. Additionally, the company's PEG ratio of 0.75 is favorable compared to the industry average of 1.58 [2]. Investors interested in the Technology Services sector should also consider other value opportunities, such as Kyndryl Holdings (KD), which has a higher forward P/E ratio and PEG ratio but a lower Zacks Rank [2]. However, Weyco Group's recent technical indicators and valuation metrics suggest a more favorable outlook for value investors.

Earnings Impact of Tariffs

Weyco Group released its 2Q25 earnings last week, showing another quarter of revenue and margin deterioration, mostly due to retailer caution. The company remains very exposed to tariffs in China and India, as part of a category that is secularly declining. Despite good returns to shareholders, the name should be significantly more discounted to offset these risks, which showed their impact in 2Q25 margins, with operating income and net income halving YoY [3]. The company's reliance on China for 60% of its footwear sourcing has made it particularly vulnerable to these tariffs. Tariffs on China are already 30%, and Weyco will be impacted by this increase. At an inventory turnover of 4, the complete impact is probably not fully felt in 2Q25, but will probably start being a problem on gross margins or demand in 2H25.

Valuation and Future Outlook

Weyco's adjusted price-to-earnings is not that high on a TTM basis (it is not cheap either). The company trades at a market cap of $285 million versus $25 million in TTM net income. That is high, at 11.5x for a name shrinking secularly, super exposed to tariffs, and delevering margins rapidly. However, the company also has $85 million in net cash, with no debt. That could reduce the EV/E ratio to about 8x. Still not cheap, but not as high. Further, the name returns most of its earnings to shareholders. It generated $8 million in net income in 1H25 ($14.5 million in CFO), and paid $5 million in dividends and repurchased $3 million in stock. This also helps in sustaining the stock price. However, the price, even at 8x earnings (adjusted), is not reflective of the challenges ahead. The company will face higher prices on inventories, either impacting margins or end demand. Both things could happen at the same time, with lower gross margins and yet lower demand, because consumers pull back on spending. I believe the name should be significantly more discounted. The company did not provide guidance for the year or for the second half, but I would not be surprised to see sales down double digits or even mid-teens across the board for the year. In 1H25 and 2Q25 alone, Weyco's net income has halved versus last year, and the challenges have not even fully started to show their worst signs. If 2H25 earnings halve as well, we could be talking of only $13 million in net income for the year ($35 million operating income in FY24 translated to $17 million in FY25 and $13 million after taxes). That would mean, even on a cash-adjusted basis, the name trades at 15x earnings, a figure that is obviously high. I think Weyco should see much lower prices before reconsidering it as an opportunity, and maintain a Hold rating.

Conclusion

While Weyco Group has shown strong fundamentals, the recent technical indicators signal caution. Investors should exercise due diligence and consider the broader market context before making investment decisions.

References

[1] https://www.ainvest.com/news/weyco-group-15min-chart-triggers-macd-death-cross-bearish-marubozu-formation-2508/
[2] https://www.nasdaq.com/articles/wg-or-kd-which-better-value-stock-right-now
[3] https://seekingalpha.com/article/4813419-weyco-is-exposed-to-tariffs-and-earnings-are-halving-but-the-stock-has-barely-adjusted