On Monday, Citi reinstated coverage on Birkenstock Holding plc (NYSE: NYSE:BIRK) stock with a Buy rating and a set price target of $65.00. The coverage, which had been previously suspended, was reinitiated following the company's recent secondary offering on June 26.
Birkenstock released 14 million shares during this offering, with 10 million coming from L Catterton and 4 million from the company's management. Additionally, there was a greenshoe option for an additional 2.1 million shares, solely from L Catterton.
Before the offering, L Catterton held approximately 81% of Birkenstock's total shares. Following the event, their ownership decreased to around 73%, not accounting for the greenshoe option.
Company executives who sold their shares did so primarily for tax purposes, as stated in a company filing on June 26. The shares they sold amounted to roughly 60% of their total ownership.
The secondary offering did not affect the total count of Birkenstock's shares, as all shares sold were secondary. This means that there was no dilution of existing shareholders' equity. The transaction provided an opportunity for the current shareholders to liquidate a portion of their investment without impacting the company's capital structure.
Despite the sale, Birkenstock has not made any changes to its current financial year 2024 guidance. The company continues to anticipate a sales growth of over 20% and expects its EBITDA to be in the range of €535 to €545 million. This guidance reflects the company's confidence in its ongoing business performance and growth trajectory.
In other recent news, Birkenstock Holding plc has seen significant changes in analyst ratings and price targets. UBS upgraded Birkenstock from Neutral to Buy and increased the price target to $85, citing the company's successful direct-to-consumer expansion strategy and growth in the Asia-Pacific region.
Concurrently, Deutsche Bank resumed coverage on Birkenstock, giving it a Buy rating with a $70 target, highlighting the company's strong margins and potential for sustained revenue growth.
Goldman Sachs, however, downgraded Birkenstock from Buy to Neutral, but raised its price target to $58. Stifel maintained its Buy rating and raised its price target to $63, while BMO Capital Markets also increased its price target to $60, maintaining an Outperform rating. These adjustments were driven by Birkenstock's strong sales and earnings, leading to an upward revision of its annual guidance.
The company's expected revenues for the fiscal year 2024 are anticipated to be between €1.77 billion and €1.78 billion, with adjusted EBITDA projections set at €535 million to €545 million. These recent developments provide investors with important insights into Birkenstock's financial performance and future expectations.
InvestingPro Insights
As Birkenstock Holding plc (NYSE: BIRK) continues to navigate the financial year with optimism, real-time data from InvestingPro provides a deeper look into the company's performance and valuation. With a current market capitalization of $10.22 billion and a high P/E ratio of 141.6, Birkenstock's valuation reflects significant growth expectations. The company's revenue has grown by 21.38% over the last twelve months as of Q2 2024, underscoring the company's strong sales momentum.
Two InvestingPro Tips highlight the company's prospects: Analysts are anticipating net income growth this year and have revised their earnings upwards for the upcoming period. Additionally, Birkenstock's impressive gross profit margins, which stood at 60.85% in the last twelve months as of Q2 2024, further substantiate the company's financial health.
For investors looking for more comprehensive analysis and additional insights, InvestingPro offers more tips on Birkenstock, which can be explored with a subscription. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With 14 additional tips available on InvestingPro, investors can gain a more nuanced understanding of Birkenstock's financial landscape and make more informed decisions.
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