Rocky Brands: B.Riley sees significant growth potential; initiates with 'buy'
25/03/2021 10:21
** B.Riley initiates coverage on footwear maker Rocky Brands
Inc RCKY.O with "buy" rating and PT of $60
** Brokerage believes RCKY has significant growth potential
from the Honeywell acquisition (Muck Boot Co and XTRATUF
brands), e-commerce growth, strong work boot demand and strong
trends in outdoor footwear
** Co in January said it will buy performance and lifestyle
footwear business of Honeywell HON.N for $230 mln urn:newsml:reuters.com:*:nASA01MPK
** Brokerage estimates recent Muck and XTRATUF acquisition
will add $0.80/shr to annual earnings, including $0.60/shr in FY
2021
** Brokerage sees growth over next several years driven by
supply chain and cost synergies as well as revenue synergies as
RCKY cross-sells brands among wholesalers
** "We expect strong growth to continue in RCKY's owned
higher-margin digital business" - B.Riley
** Brokerage sees additional room to grow the retail
segment, which will likely further increase margins
** YTD, the stock is up 55%
(Reporting by Aniruddha Chakrabarty)
((aniruddha.c.thomsonreuters.com@reuters.net))