More details from Alex Brown:
BT Alex. Brown Incorporated
DAILY RESEARCH HIGHLIGHTS--PART 4
Tuesday, February 3, 1998
WOLVERINE WORLD WIDE, INC. (WWW) (2/2/98, 27 5/8, STRONG BUY)
Marcia Aaron (415) 477-4258
Joe Grillo (415) 477-4246
C. Scott Webster (415) 477-3246
* The footwear industry's most consistent Company. Wolverine World
Wide should post its fifth year of 25+% operating income growth
when it reports earnings on February 10th.
* Wolverine World Wide is a leading designer, manufacturer and
marketer of a broad line of quality comfortable casual shoes,
rugged outdoor and work footwear and slippers and moccasins. The
Company's products are designed to meet the needs of men, women
and children.
* Brands include Hush Puppies, Wolverine, Caterpillar, Harley
Davidson, Merrell, Hy-Test, Bates and Coleman. The product
offering is casual and the brands serve a variety of distribution
channels from mass to department stores.
* Hush Puppies revival in full swing. Fall 1997 sell through was
robust and Fall 1998 product is being well received by major
retailers.
* Caterpillar Footwear represents a significant new growth vehicle.
CAT Footwear is one of the hottest boot brands in Europe and that
success is beginning to translate into US success. This will be
the fastest growing brand for Wolverine.
* Wolverine Worldwide is a global branded Company with more than
half of all pairs sold outside the US. Pacific Rim exposure is
limited with only 11% of pairs sold into this region, far less
than many other marketers in the footwear industry.
* Our 1997 EPS estimate is $0.95 versus $0.76 (+25%). Our 1998 EPS
estimate is $1.18 (+24%) and our 1999 EPS estimate is $1.42
(+20%). We project earnings will compound at a 20-25% annual
rate over the next 3-5 years.
* Initiating coverage with a "strong buy" (1) investment rating.
Our 12 month price target range is $36, which is, based on 25x
our 1999 EPS estimate of $1.42. The stock has historically
traded at an average P/E of 26 over the last year. |
