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Monday, UBS analysts raised the price target on Birkenstock Holding plc (NYSE: NYSE:BIRK) stock to $72 from $68, while keeping a Buy rating on the shares. Currently trading at $52.36, the stock sits well below the broader analyst target range of $56.83 to $82.15. According to InvestingPro, the company maintains impressive gross profit margins of 58.7%. The firm’s analysts are optimistic about Birkenstock’s upcoming second-quarter report, anticipating that it will demonstrate solid performance and a strong growth outlook, excluding foreign exchange (FX) impacts.
The analysts expect Birkenstock to effectively manage the challenges posed by tariffs, a view that is likely to be well-received by investors, especially since the sentiment in the market tends towards the bearish side. This positive outlook is set in contrast to the more subdued expectations from other companies in the Softline sector. InvestingPro data supports this optimistic view, showing strong revenue growth of 20.51% and a robust financial health score rated as "GREAT."
However, UBS analysts caution that there is a risk if unfavorable FX movements during the quarter lead Birkenstock to lower its adjusted financial year 2025 EBITDA margin guidance more than the market anticipates. The options market is currently pricing in a significant move in Birkenstock’s stock price around the earnings announcement, expecting a +/- 8.3% jump, as opposed to the historical average move of 6.9%.
The analysts at UBS align with the options market’s expectation, implying that the stock could see notable volatility following the company’s earnings release. The adjustment in the price target reflects confidence in Birkenstock’s ability to sustain growth and navigate the current economic environment effectively.
In other recent news, Birkenstock Holding plc reported a 19% increase in revenue for the first quarter of 2025, exceeding consensus estimates with a total of €362 million. The company’s gross margin remained steady at 60.3%, while the adjusted EBITDA margin grew to 28.2%, surpassing expectations. Despite these impressive figures, Birkenstock decided to maintain its full fiscal year 2025 guidance, reflecting a cautious approach given the early stage of the year. BMO Capital Markets continues to hold an Outperform rating on Birkenstock, with a $70 price target, citing strong revenue growth and robust margins. Stifel, however, revised its price target for the company to $62, maintaining a Buy rating, emphasizing the company’s resilience against economic challenges. Meanwhile, Bernstein SocGen Group kept a Market Perform rating with a $57 target, noting significant growth in Birkenstock’s wholesale sector. Evercore ISI highlighted that tariffs could potentially reduce Birkenstock’s EBIT by 8% in FY26, a less severe impact compared to other companies like Nike (NYSE:NKE) and On. These recent developments indicate varying analyst perspectives on Birkenstock’s performance and future prospects amidst economic fluctuations.
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