In a surprising turn of events, Wall Street analysts are now endorsing Birkenstock Holding Plc as a robust addition to investors’ portfolios, despite its lackluster initial public offering less than a month ago.
As the customary quiet period concludes, analysts are urging investors to consider buying the stock, currently trading about 10% below its IPO price from its October 11 listing. The shares held steady in Monday’s New York trading session.
Despite a challenging debut attributed to market timing, the German shoe manufacturer, renowned for its cork-soled sandals, has garnered 11 buy recommendations, with seven holds and no sells, according to Bloomberg data. The company boasts an average 12-month price target of $46.51, around 13% above Friday’s closing price of $41.16 and close to the $46 IPO price.
Termed a «comfortable investment» by BMO Capital Markets analyst Simeon Siegel, the stock received an outperform rating. Siegel sees growth potential in the company’s core offerings, product expansions, and geographic reach.
Piper Sandler analysts Edward Yruma and Abbie Zvejnieks also expressed bullish sentiments, grading the shares as overweight. They highlighted Birkenstock’s unique position as both a luxury and performance footwear brand, differentiating it in their coverage. They emphasized the potential impact of wellness and craftsmanship on future growth.
Despite a challenging trading debut that saw a 12.6% decline last month, some banks took a less bullish stance. Morgan Stanley analysts, while recognizing industry-leading profitability and expanding free cash flow, rated the stock equal-weight, indicating that these positives are already factored into the current price.
HSBC Holdings Plc analyst Erwan Rambourg praised Birkenstock’s fundamentals and its lack of exposure to China as a «silver lining» amid economic concerns. However, he gave the stock a hold based on its current valuation.
In summary, Birkenstock is emerging as an appealing option for investors, with analysts optimistic about its growth potential and unique market positioning. Despite initial challenges, the stock is now viewed as having long-term investment potential, and analysts see it as a valuable addition to investor portfolios.