Investors should wait and see how much sales of Crocs were inflated during the pandemic before buying more shares, according to Loop. Laura Champine, Loop's director of research, downgraded Crocs to hold from buy, saying in a Monday note that clients should wait for updated guidance from the company now that a bump in sales from the pandemic could be over for the footwear company. "The Covid crisis was obviously a very significant catalyst for growth at Crocs," Champine wrote. "We think investors' psyche has changed significantly over the past few months, and the investing community will be reluctant to step into Crocs until there is clarity on how much sales and earnings were inflated beyond a sustainable level during the Covid crisis." Loop slashed the price target nearly in half to $80 from $150. The new price target implies just 5.7% upside from Friday's closing price. A return to socializing could dampen sales in Crocs as consumers seek more fashionable footwear, analysts said. The footwear brand may also not be able to pass on prices to consumers as spending curtails later this year. An acquisition last year of Hey Dude, a casual footwear company, may benefit Crocs in the long term, but analysts at Loop are doubtful that any benefits from the purchase will be seen this year. Shares of Crocs dipped nearly 1% in Monday morning trading. —CNBC's Michael Bloom contributed to this report.
Investors should wait and see how much sales of Crocs were inflated during the pandemic before buying more shares, according to Loop.