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On Thursday, BMO Capital Markets adjusted their outlook on Birkenstock Holding plc (NYSE: NYSE:BIRK), increasing the price target from $70.00 to $75.00 while maintaining an Outperform rating on the company’s shares. The firm’s analysts highlighted Birkenstock’s impressive growth trajectory, particularly in the second quarter, which featured a significant acceleration in direct-to-consumer (DTC) sales and performance in the Americas region. The company, currently valued at $10.23 billion, has demonstrated strong momentum with a 19.55% return over the past six months. According to InvestingPro analysis, the stock appears to be trading near its Fair Value.
The analysts noted that Birkenstock’s strong revenue growth of 20.51% positively impacted gross margin (GM) of 58.7% and EBITDA of $550.63 million. They also pointed out that management has revised the company’s constant currency (CC) revenue guidance upwards to the higher end of the spectrum and has raised the forecast for adjusted EBITDA. This update comes despite—or perhaps in light of—the current uncertain economic climate, which the analysts believe can offer opportunities for well-established brands. InvestingPro data reveals the company maintains a healthy financial position with a current ratio of 2.84, indicating strong liquidity.
The report from BMO Capital Markets underscored that Birkenstock’s industry-leading growth is expected to continue, with the company benefiting from relative insulation from tariff impacts. The analysts also emphasized that there remains significant untapped market potential for the brand, which they expect to be realized while maintaining strong profit margins. InvestingPro subscribers have access to 8 additional key insights about Birkenstock’s financial health and growth potential through exclusive ProTips.
Birkenstock’s upward revision in financial projections and the raised price target reflect the company’s robust performance and strategic positioning. The firm’s analysts have reiterated their confidence in Birkenstock’s ability to navigate through challenging market conditions and capitalize on its strong brand presence to drive further growth. Trading at a P/E ratio of 35.97, the new price target of $75.00 is based on an approximate 30 times multiple of the forecasted fiscal year 2026 earnings per share (EPS).
In other recent news, Birkenstock Holding plc has reported strong performance in its second quarter, with notable growth in its closed-toe shoe styles, which are selling at twice the rate of sandals. The company’s gross margin exceeded expectations, rising by 140 basis points year-over-year, and management anticipates a full-year gross margin close to 60%. UBS has raised its price target for Birkenstock to $72 while maintaining a Buy rating, reflecting confidence in the company’s ability to manage challenges such as tariffs. Similarly, BMO Capital Markets has maintained an Outperform rating with a $70 price target, citing the company’s resilience and strategic focus on growth areas. Meanwhile, Stifel has lowered its price target to $62 but continues to recommend a Buy rating, emphasizing Birkenstock’s earnings power and potential relief from possible tariff repeals. Morgan Stanley (NYSE:MS) also reiterated an Overweight rating with a $57 target, highlighting Birkenstock’s market share gains amid industry challenges. Evercore ISI provided a broader industry context, warning of potential tariff impacts on competitors but estimating only an 8% EBIT reduction for Birkenstock under similar conditions. These developments underscore Birkenstock’s strategic positioning and adaptability in a fluctuating economic environment.
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