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On Thursday, Stifel analysts demonstrated confidence in Birkenstock Holding plc (NYSE:BIRK), raising the company’s price target from $62.00 to $70.00, while reiterating a Buy rating on the stock. With a current market capitalization of $10.23 billion and an impressive 20.51% revenue growth over the last twelve months, the firm’s decision follows Birkenstock’s reported revenue growth and gross margin performance, which surpassed Stifel’s projections. InvestingPro data shows the company maintains a strong financial health score of 3.17, rated as "GREAT."
Birkenstock’s revenue saw a significant increase, with a reported €10 million surge and 18% constant currency growth. This growth was attributed to the brand’s expanding global awareness and adoption, especially among younger consumers, which has led to loyal buying behaviors. InvestingPro analysis reveals an impressive gross profit margin of 58.7%, with multiple additional ProTips available for subscribers. Additionally, the company’s gross margin exceeded Stifel’s estimates by 130 basis points.
The analysts noted that Birkenstock’s success is particularly notable given the current uneven consumer landscape. The brand has been able to generate interest in higher value products, such as closed-toe and leather items, which has been a key factor in their revenue boost. The company’s ability to adjust prices and effectively utilize new manufacturing capacity has also been highlighted as a contributor to their profit capacity.
Looking forward, Stifel expressed optimism regarding Birkenstock’s second half-year guidance, which anticipates a 15% year-over-year revenue growth, largely driven by the adoption of closed-toe products and expected to be weighted towards the September quarter. The analysts commended Birkenstock’s execution and noted improved visibility in the company’s profitability, with adjusted EBITDA guidance for fiscal year 2025 revised upwards from €660 million - €670 million, compared to the previous range of €639 million - €661 million.
The raised price target to $70 reflects a 15.7x enterprise value to EBITDA multiple based on Stifel’s fiscal year 2026 adjusted EBITDA estimate of €773 million. Currently trading at an EV/EBITDA multiple of 19.33x, InvestingPro’s Fair Value analysis suggests the stock is slightly overvalued at current levels. This adjustment by Stifel underscores their belief in the sustained growth and profitability of Birkenstock in the coming years. For deeper insights into Birkenstock’s valuation and growth prospects, access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Birkenstock Holding plc reported a strong second quarter, with an adjusted EBITDA of €200 million, surpassing analyst estimates by 4.5%. The company’s sales increased by 18% in constant currency terms, with significant growth across wholesale and direct-to-consumer channels. Following these results, Birkenstock raised its sales guidance to the higher end of the 15-17% range and increased its EBITDA margin guidance to 31.3%-31.8%. BofA Securities raised its price target for Birkenstock to $73, citing sustained brand popularity and improved gross margins. Similarly, BTIG and BMO Capital Markets increased their price targets to $72 and $75, respectively, highlighting the company’s robust performance and strategic positioning. Morgan Stanley (NYSE:MS) maintained its Overweight rating with a $57 target, emphasizing Birkenstock’s ability to navigate industry challenges and expand its market share. The company’s diversification into "closed-toe" shoe styles and improved gross margins were noted as key growth drivers. These developments reflect the company’s strong financial performance and potential for continued growth.
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