Birkenstock Holding: Analysts’ Positive Outlook Following IPO

by Warren Seah

Analysts from major Wall Street banks have recently provided their research and analysis on Birkenstock Holding following the company’s successful initial public offering (IPO). The consensus view among these analysts is overwhelmingly positive.

After experiencing an 11% decline on its first day of trading (October 11), Birkenstock shares managed to gain 2.4% and closed at $41.16 on Friday. In the wake of the IPO, several Wall Street firms, which had previously underwritten the stock (ticker: BIRK), released Buy recommendations over the weekend and on Monday.

Drawing from price targets and ratings provided by 16 Wall Street firms monitored by Bloomberg, the average call suggests that the stock has the potential to increase by slightly more than 13% over the next year, based on Friday’s closing price.

One notable analyst, Matthew Boss from J.P. Morgan, initiated coverage on Monday with an Overweight (equivalent to Buy) rating and set a target price of $48. Boss highlighted the growth potential of Birkenstock in the clogs and closed-toe shoes market. He pointed out that this category accounted for approximately 20% of total footwear sales in 2022, up from 11% in 2018, indicating that the company’s growth is still in its early stages.

Simeon Siegel from BMO also expressed an Outperform rating for the stock, with a target price of $50. Siegel referred to Birkenstock as “a comfortable investment,” emphasizing the brand’s potential for expansion, particularly in terms of geographic reach.

Amidst these positive evaluations from analysts, Birkenstock Holding seems to be well-positioned for future growth.

Birkenstock: Expanding Popularity and Future Growth Potential

By Karishma Vanjani

The global footwear brand, Birkenstock, has set its sights on expanding its presence in the Asian-Pacific region, including countries like China and India, where the brand is still in its early stages of growth. According to a recent securities filing, the United States accounted for 54% of Birkenstock’s fiscal 2022 revenue, while the Asian-Pacific region, the Middle East, and Africa made up 10% of the total.

Analysts from financial institutions such as Citi, UBS, HSBC, and Morgan Stanley have shared their perspectives on Birkenstock’s future prospects. Citi’s Paul Lejuez predicts that Birkenstock will increase its number of stores in the Americas by adding eight to ten new outlets over the next three years. While physical stores are not expected to be the primary source of direct-to-consumer sales, expanding into North America is seen as a quick win and a crucial factor for driving future sales growth. Lejuez has a Buy rating on Birkenstock’s stock and has set a target price of $52.

Meanwhile, UBS’s Jay Sole has taken a more cautious stance, giving Birkenstock’s shares a Hold rating. Sole believes that although the company has the potential to establish itself as a leading casual footwear brand, the current stock price already reflects this opportunity. He has set a target price of $44.

In concurrence with UBS, both HSBC and Morgan Stanley advise investors to hold off on buying Birkenstock’s stock, suggesting a more prudent approach.

Despite these mixed ratings and recommendations, Birkenstock’s shares managed to rebound on Monday, gaining 0.9% to reach $41.54.

As the brand continues to gain popularity worldwide and explores new markets, Birkenstock remains focused on its mission to provide comfortable and stylish footwear options. With its strategic expansion plans and growing reputation, the future looks promising for this iconic brand.

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