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Birkenstock Holding plc (New York Stock Exchange: BIRK) gained in early trading on Monday after both UBS and Citi positively influenced footwear stocks.
UBS upgraded Birkenstock (BIRK) from Neutral to Buy and increased its price target to $63. said its bullish view on BIRK is based on confidence that it can achieve higher sales and margins in the long term. In particular, Birkenstock (birch) is successfully executing its direct-to-consumer expansion strategy better than expected. UBS forecasts average selling prices for Birkenstock (birch) will be stronger than expected. Due to the recent momentum, UBS raised its five-year EPS CAGR forecast from 21% to 25% and now has a 2026 EPS estimate on BIRK that is 10% above the consensus estimate.
Meanwhile, Citi resumed coverage of Birkenstock (BIRK) with a Buy rating and a $65 price target. Analyst Paul Lejeuz noted that BIRK is one of the fastest-growing companies in the retail sector and has industry-leading EBIT margins. “With just €1.5 billion ($1.6 billion) in sales in FY23, BIRK has significant scope for further growth supporting 15-19 percentage point sales growth and a compound annual growth rate (CAGR) in earnings per share (EPS) of over 20% over the next three years,” he noted.
Birkenstock (BIRK) shares rose 1.96% in early trading on Monday. Birkenstock (BIRK) fell last week along with other footwear names after soft forecasts from Nike (NKE) rattled the sector. Nike (NKE) warned that sales will decline 10% in its current quarter due to uneven consumer trends and will fall at an average single-digit pace for the full year. “Nike’s fourth quarter report indicated that its fundamental trends are much worse than we thought. Our key takeaway is that there will not be a quick recovery in Nike’s earnings,” analyst Jay Sole noted of the report.
