On Tuesday, JPMorgan adjusted its outlook on Boot Barn (NYSE:BOOT) Holdings Inc. (NYSE: BOOT) shares, increasing the price target to $125 from $115 while sustaining an Overweight rating on the stock.
The firm highlighted Boot Barn's leading position in the fragmented $20 billion western and work wear market, noting the company's potential for steady margin improvement and EBIT margin expansion.
Boot Barn, recognized as the top player in its sector, boasts about 90% of its sales at full price and maintains a 30% assortment in work wear.
The company's niche positioning and the destination nature of its stores are seen as differentiators that support its growth strategy.
JPMorgan anticipates a consistent top-line performance from Boot Barn, with expectations of above 3-5% same-store sales and over 10% square footage growth, which could translate into a 20% or higher EPS growth profile.
The firm's analysis suggests that Boot Barn is on track for merchandise margin improvement over time, aided by low fixed-cost hurdles, which should contribute to an EBIT margin increase toward 10% or more in the future. This optimistic outlook is based on the company's strong sales performance and expansion strategy.
JPMorgan also identifies several potential tailwinds for Boot Barn's business in the post-pandemic landscape. These include a trend towards casualization, an acceleration in market share, and a recovery in oil and gas sectors, as well as rodeo and Western events—all of which could further boost the company's performance.
The revised price target reflects confidence in Boot Barn's ability to capitalize on these opportunities and continue its trajectory of financial growth and market leadership.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.