3 Of 4 Birkenstock Analysts Are Bullish: What Does BofA Securities Expect From Shoemaker?

Shares of Birkenstock Holding PLC BIRK climbed more than 6% last week, after the IPO in mid-October.

Here’s a look at analysts who recently initiated coverage of the stock.

• Telsey Advisory Group analyst Dana Telsey initiated coverage with an Outperform rating and a price target of $47.
• Stifel analyst Jim Duffy initiated coverage with a Buy rating and a price target of $47.
• Piper Sandler analyst Edward Yruma initiated coverage with an Overweight rating and a price target of $50.
• BofA Securities analyst Lorraine Hutchinson initiated coverage with a Neutral rating and a price target of $44.

Check out other analyst stock ratings.

Telsey Advisory Group: Birkenstock has maintained “strong topline trends and an industry-leading margin profile while expanding its portfolio and reach,” Telsey said in a note.

Opportunities for direct-to-customer (DTC) expansion, including ecommerce investments, “can foster a stronger relationship with the consumer, while enabling greater brand control and generating a stronger margin profile,” she added.

Stifel: Birkenstock has “considerable growth opportunity” in the non-athletic footwear market, which is valued at €200 billion, Duffy said.

“The premium nature of the product, selective distribution model and vertically integrated European manufacturing process, enable advantaged per pair economics, supporting the standout financial model,” the analyst wrote. “We see capacity for multiple years of mid-teens topline growth, with best-in-class EBITDA margins, supporting our constructive rating,” he added.

Piper Sandler: “While Birkenstock is benefiting near term from fashion trends, we believe that its long-term focus on wellness, craftsmanship, and provenance are key growth drivers over the next year,” Yruma wrote in a note.

The company differentiates itself from other brand by its unique characteristic of being “both a luxury brand and performance footwear brand,” the analyst said. “. A 30%+ adjusted EBITDA margin and mid-teens revenue growth give it some of the strongest financial profiles in our coverage,” he added.

BofA Securities: Although the brand is strong and has unique attributes, “we think outsized growth on top of the robust recent trends will be difficult,” Hutchinson stated.

“BIRK expects to achieve 10-12% unit growth over the next several years (compared to 5% from ’18-’23),” the analyst wrote. “The improvement would be aided by expanded capacity, but this could prove difficult to achieve if the global macro backdrop remains bleak,” she added.

BIRK Price Action: Shares of Birkenstock Holding had declined by 0.61% to $40.91 at the time of publication Monday.

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