Birkenstock: “Prepare for Growth,” According to BTIG

BTIG has begun coverage of Birkenstock, assigning a Buy rating and a price target of $60. They emphasize the company’s strong growth potential and its ability to expand on a global scale.

In a recent research note, BTIG referred to Birkenstock as a distinctive retail growth story that combines a rich brand heritage with a bright future. They forecast strong double-digit percentage growth in the long term, anticipating mid-to-high teens growth along with stable to improving margins.

Despite recent worries regarding slower direct-to-consumer performance and initial capacity investments that have seen the stock decline by more than 20%, BTIG believes these concerns are exaggerated.

The firm posits that the current valuation offers an appealing entry point, with Birkenstock’s multiples lower than those of slower-growing competitors.

BTIG highlights several key factors that they believe the market undervalues. Firstly, Birkenstock’s focus on functionality and high consumer loyalty results in significant repeat purchases, contributing to a stable financial profile. Secondly, they note that the company’s robust distribution network effectively enhances its direct-to-consumer business, acting as a vital customer acquisition tool.

Lastly, BTIG points out that recent investments have doubled production capacity, positioning Birkenstock to seize growth opportunities and expand globally.

BTIG encourages investors to prepare for growth with Birkenstock, asserting that the company is well-equipped to achieve steady and predictable expansion in the years ahead.