Birkenstock should be purchased by investors as its share price experiences weakness, analysts at Jefferies recommend.
Shares of the sandal maker traded 2.3% lower at US$45 on Friday after the company reported its first quarter;s financial results following its initial public offering (IPO) on October 11, 2023.
For the quarter, Birkenstock posted revenue of €375 million (about US$408 million), up 16% year-over-year, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of €96 million (about US$105 million) with a 26% margin.
The Jefferies analysts view the results as “encouraging,” noting top-line strength experienced in the Americas, with sales growing 30% year-over-year.
“The company’s financial year adjusted EBITDA outlook could be viewed as mixed; however, we believe management is likely exercising caution,” they wrote in a note to clients.
“Therefore, we reiterate our ‘Buy’ rating and recommend investors purchase shares on today’s weakness.”
The analysts also raised their price target on the stock from US$50 to US$52.
They see the “best-in-class brand” as able to continue to execute its long-term growth algorithm.
“Birkenstock has undergone a significant transformation since the appointment of CEO Oliver Reichert, shifting from a family-owned, production-oriented business to a global footwear brand,” they wrote.
“Given its historical brand and loyal customer base, the company looks well-positioned to drive strong top-line growth, maintain its attractive margin profile, and expand its addressable market.”