Barclays Capital believe the ‘de-rating’ in shares of Dr Martens PLC (LSE:DOCS), maker of the iconic cushion-soled boots and shoes, has been ‘overdone’.
Over the past six months, the stock has lost 17% of its value despite hitting its IPO guidance.
Barclays says the reasons for this are the departures of the chief marketing and chief digital officers and the lack of an earnings ‘beat-and-raise narrative’, along with Covid and supply chain concerns.
The investment banking arm of the high street lender believes Dr Martens is an ‘attractive brand with many leavers to drive revenue and EBITDA growth’.
That conviction was underlined by its upgrade recommendation on the shares to ‘overweight’ from ‘equal weight’.
Barclays reckons the shares are worth 480p each. The current price is 413p.
In the note, it said: “We continue to like the exposure to a strong brand (Google Trends broadly supportive), and we believe the company still has the ability to grow via significant headroom in many geographies, conversion of markets, rationalising wholesale, and improving the DTC [direct-to-consumer] mix.”