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Investing.com - Stifel maintained its Buy rating and $70.00 price target on Birkenstock Holding plc (NYSE:BIRK) ahead of the company’s fiscal third-quarter 2025 report, citing strong brand fundamentals despite currency challenges. According to InvestingPro data, analysts are largely bullish with a consensus "Strong Buy" recommendation, though 8 analysts have recently revised earnings estimates downward for the upcoming period.
The investment firm adjusted its estimates to account for euro strength against the U.S. dollar, which is expected to create headwinds for reported revenue and profitability. Despite these currency pressures, Stifel noted that shares denominated in the weaker USD provide a partial valuation offset. The company maintains impressive gross profit margins of 59% and operates with a healthy current ratio of 3.06, indicating strong financial flexibility to navigate these challenges.
Stifel reaffirmed its outlook for mid-to-high-teens percentage constant currency top-line growth for Birkenstock, while incorporating the negative impact of foreign exchange on revenue and gross profit. This outlook aligns with the company’s recent performance, as InvestingPro data shows robust revenue growth of 19.9% over the last twelve months. The firm’s research indicates increasing consumer engagement in major domestic retailers and accelerated global search interest during the June quarter.
The footwear company’s relatively favorable EU tariff rates of 15%, diversified revenue base, and capacity for price increases position it to navigate tariff headwinds more effectively than many competitors, according to Stifel’s analysis.
The United States represents 46% of Birkenstock’s fiscal year 2024 revenue, with Stifel observing growing interest in both U.S. and international markets for the casual footwear brand.
In other recent news, Birkenstock Holding plc has seen several notable developments. UBS has raised its price target for Birkenstock to $77, maintaining a Buy rating, due to solid underlying topline trends in the third quarter. Meanwhile, Fitch Ratings has upgraded the company’s Long-Term Issuer Default Rating to ’BB+’ from ’BB’, citing strong profitability and a conservative financial policy. Goldman Sachs has also upgraded Birkenstock from Neutral to Buy, highlighting the company’s strong growth outlook and pricing power. Piper Sandler reiterated an Overweight rating with a $65 price target, despite concerns about tariffs and foreign exchange challenges impacting the stock’s performance. William Blair maintained its Outperform rating but adjusted revenue estimates due to currency translation impacts, noting a significant drag on the growth rate in the Americas segment. These developments reflect a mix of optimism and caution among analysts regarding Birkenstock’s financial prospects.
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