For shoemaker Skechers (NYSE:SKX), the notion of landing a major new NBA figure as an endorser seemed like a great way to go. But perhaps some are hanging too much hope on this deal. Investors certainly seem skeptical about the notion of Skechers going to basketball shoes as they sent its shares down nearly 3% in the closing minutes of Wednesday’s trading session.
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The deal in question is currently in progress between Skechers and Joel Embiid, who was the league MVP for the 2022-2023 season. Embiid, who plays with the Philadelphia 76ers, was recently spotted wearing a Skechers shoe during a recent 76ers practice session. When the deal is complete, Embiid will start wearing the shoes routinely. But that’s not all; reports note that Skechers is also working to sign Terance Mann of the Los Angeles Clippers and Julius Randle of the New York Knicks.
There are also some signs that Skechers may have made the wrong pick in turning to Embiid. Basketball aficionados may already know that Embiid has something of a history of below-the-waist injuries. Thus, should Embiid end up with another injury, eyes will turn toward his new footwear, wondering just how much these “untested” shoes had to do with it. Granted, the shoe may not have had anything to do with the injuries, but it will likely have a negative halo effect all the same. However, there are signs Skechers might be able to get Embiid for a bargain rate, using his last sneaker deal as a guide.
Is Skechers a Buy or Sell?
Turning to Wall Street, analysts have a Strong Buy consensus rating on SKX stock based on nine Buys and one Hold assigned in the past three months, as indicated by the graphic below. Furthermore, the average SKX price target of $61.89 per share implies 26.59% upside potential.
