Investing.com -- BTIG initiated coverage of Birkenstock (NYSE:BIRK) with a Buy rating and a $60 price target on Thursday, citing the company’s strong potential for growth and its 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 percent top-line growth" in the long term, projecting mid-to-high teens growth with stable to improving margins.
Despite recent concerns about slower direct-to-consumer (DTC) performance and upfront capacity investments, which have caused the stock to pull back by over 20%, BTIG believes these fears are overblown.
The firm argues that the current valuation presents an attractive entry point, as Birkenstock's multiples are now below those of slower-growing peers.
“BIRK stands out as a unique retail growth story that marries a long brand legacy with future expansion potential,” said BTIG.
The firm believes several key factors are underappreciated by the market.
First, Birkenstock’s function-led approach and strong consumer loyalty drive high repeat purchases, creating a stable financial profile.
Second, they highlight the company’s quality distribution network allows wholesale channels to act as a profitable extension of its DTC business, serving as a key customer acquisition tool.
Finally, BTIG says that recent investments have doubled production capacity, which will enable Birkenstock to capitalize on growth opportunities and scale globally.
BTIG says investors should "buckle up" for growth with Birkenstock, believing the company is well-positioned to deliver consistent and predictable expansion in the coming years