KeyBanc raises Boot Barn stock rating, sets $190 target

On Thursday, KeyBanc Capital Markets revised its stance on Boot Barn (NYSE:BOOT) Holdings, Inc. (NYSE: BOOT), elevating the company's stock rating from Sector Weight to Overweight. The firm has also set a new price target of $190.00 for the retailer. The upgrade follows Boot Barn's positive preannouncement for the third quarter of fiscal year 2025, which along with a consistent track record of execution, prompted the reassessment. According to InvestingPro data, 11 analysts have revised their earnings upward for the upcoming period, with the stock trading near its 52-week high of $169.83.

According to KeyBanc analyst Ashley Owens, Boot Barn's success is evident in both its physical stores and digital platforms. The company's new store locations are on track to generate roughly $3 million each, and digital sales are expected to constitute a larger share of total revenue in the future. With a market capitalization of $5 billion and a healthy current ratio of 2.25, Boot Barn has demonstrated strong financial management. Owens highlighted the company's increasing supply chain efficiency and improved economies of scale in purchasing, which have contributed to a second consecutive year of gross margin improvements of over 100 basis points.

The analyst's price target of $190.00 is grounded in a valuation of 23.9 times the estimated earnings per share for the calendar year 2026. The optimism surrounding Boot Barn is also supported by several growth opportunities identified by KeyBanc. These include the potential of owned brands, a steady store expansion at a 15% cadence, further digital growth, and continued margin enhancement. InvestingPro analysis reveals impressive momentum, with a 122.1% return over the past year and a forecasted revenue growth of 15% for FY2025.

Boot Barn's growth strategy appears to be well-received, as the company leverages its owned brands and pursues expansion in both its physical and digital footprints. KeyBanc's analysis suggests that these factors, combined with the retailer's ability to scale its operations effectively, position Boot Barn favorably for future performance.

The company's focus on margin expansion through supply chain optimization and economies of scale in procurement is expected to continue driving profitability. With these strategic initiatives in place, KeyBanc anticipates that Boot Barn will sustain its momentum over the upcoming quarters, underpinning the upgraded rating and elevated price target.

In other recent news, Boot Barn Holdings Inc. has experienced significant growth, exceeding its own top and bottom-line expectations in the third quarter. The company reported strong financial results and revealed changes in its C-suite management team. Piper Sandler maintained an Overweight rating on the company's shares, reaffirming confidence in Boot Barn's ability to sustain its growth trajectory and profitability.

Meanwhile, Walmart (NYSE:WMT) Inc.'s advertising segment, Walmart Connect, generated $3.4 billion in fiscal year 2023, a 26% year-over-year increase. The acquisition of VIZIO expands Walmart's reach, bringing in new potential customers. KeyBanc analysts maintain an Overweight rating for Walmart, suggesting potential upside.

Analysts from Jefferies, BTIG, and JPMorgan have all increased the price target for Boot Barn shares, while maintaining positive ratings. However, Craig-Hallum analysts anticipate more challenging comparisons in the upcoming fiscal year and maintain a Hold rating. These are just a few of the recent developments in the retail sector.

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