Analyst Lorraine Hutchinson of Bank of America Securities reiterated a Buy rating on Birkenstock Holding plc (BIRK – Research Report), retaining the price target of $70.00.
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Lorraine Hutchinson’s rating is based on Birkenstock Holding plc’s promising growth prospects and strategic shifts in product offerings. The company has demonstrated robust double-digit sales growth, and despite a temporary slowdown in direct-to-consumer (DTC) sales, the overall sales trajectory remains positive. With the normalization of sales mix and an expected acceleration of DTC revenue in the latter half of the year, Birkenstock’s financial performance looks promising.
Moreover, Birkenstock’s strategic focus on expanding its closed-toe shoe offerings is transforming it into a year-round brand, which is anticipated to bolster average selling prices and drive substantial revenue growth. The company’s management has reaffirmed its full-year guidance, with strong EBITDA and gross margin projections, further supporting Hutchinson’s Buy rating. The anticipated improvement in gross margins, particularly in the second half of the year, and the balanced growth across segments underscore the potential for a higher valuation.