Jefferies downgrades Boot Barn on valuation stretch despite solid fundamentals

Published 23/07/2025, 16:48
© Reuters.

Investing.com -- Jefferies downgraded Boot Barn (NYSE:BOOT) Holdings to Hold from Buy, saying the stock’s recent run-up leaves limited near-term upside, even as the company continues to perform well operationally.

Boot Barn shares are trading at around 24 times forward earnings, well above the company’s five-year average of 18x and in line with its +1 standard deviation level, Jefferies noted. The firm maintained a $175 price target.

The downgrade reflects valuation concerns rather than any deterioration in fundamentals. Jefferies said demand remains healthy, aided by the recent surge in country music popularity, and highlighted ongoing customer acquisition and store growth.

Exclusive brand penetration and omnichannel initiatives are also seen as positive contributors.

Jefferies raised its first-quarter estimates based on stronger foot traffic and sales data but left second-half forecasts unchanged.

Fiscal 2027 EPS is projected at $7.24, above the $7.17 consensus, though the firm sees much of the expected growth already reflected in the stock price.

Operating margin is forecast to reach 12.2% in FY2026, close to consensus and slightly below the company’s historical average of 13%.

Tariff exposure is expected to decline meaningfully by the second half of the year.

While Jefferies remains confident in Boot Barn’s long-term outlook, it believes the current risk/reward is balanced, with valuation multiples well ahead of peers averaging around 15x.

 

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