Investing.com – BTIG initiated coverage on Birkenstock (NYSE:) on Thursday with a Buy rating and a $60 price target, citing the company’s strong growth potential and ability to expand globally.
In a research note to clients, BTIG described Birkenstock as a unique retail growth story that combines a long brand legacy with a promising future. BTIG forecasts “strong double-digit revenue growth” over the long term and expects mid-to-high-teens growth with stable to improving margins.
Despite recent concerns about slower direct-to-consumer (DTC) performance and initial capacity investments, which have caused the stock price to fall by more than 20%, BTIG believes these fears are overblown.
The company states that the current valuation offers an attractive entry point, because Birkenstock’s prices are now lower than those of slower-growing peers.
“BIRK stands out as a unique retail growth story that combines a long brand legacy with future expansion potential,” said BTIG.
The company believes that several key factors are undervalued by the market.
Firstly, Birkenstock’s function-oriented approach and strong consumer loyalty ensure high repeat purchases, creating a stable financial profile.
Second, they emphasize that the company’s quality distribution network enables wholesale channels to act as a profitable extension of its DTC business and serve as an important customer acquisition tool.
Finally, BTIG says recent investments have doubled production capacity, allowing Birkenstock to take advantage of growth opportunities and scale globally.
BTIG says investors should be committed to growth at Birkenstock as they believe the company is well positioned to deliver consistent and predictable growth in the coming years.
