Friday - Stifel has updated its financial outlook on Birkenstock Holding plc (NYSE: NYSE:BIRK), raising the price target to $63 from $54 and maintaining a Buy rating on the stock. This adjustment comes after the company reported a 23% increase in currency-neutral revenue to €481 million, surpassing Stifel's projections. Adjusted EBITDA also exceeded expectations, reaching €162 million against the estimated €142 million.
The firm's revised forecasts are based on Birkenstock's latest financial guidance, which anticipates revenues between €1.77 billion and €1.78 billion for the fiscal year 2024. This represents an annual growth of 19% as reported, or 20% on a currency-neutral basis. Adjusted EBITDA is also expected to climb, with projections set at €535 million to €545 million, up from the previously guided range of €520 million to €530 million.
Stifel's analysis suggests that Birkenstock's second half of fiscal 2024 could see revenue growth of 17%, with an adjusted EBITDA margin of 30%. This outlook is consistent with the company's long-term targets and may even offer potential for further growth.
The firm recognizes Birkenstock's well-distributed strength across various regions and notes a particular increase in market share for closed-toe shoe styles, led by the Boston clog.
The positive adjustments by Stifel are fueled by Birkenstock's effective execution of its global brand strategy and its engineered scarcity distribution model. These factors contribute to what Stifel views as a favorable risk/reward scenario for investors.
In light of these developments, Stifel has raised its estimates, with the new stock price target reflecting an 18.4x enterprise value to EBITDA multiple based on the forecasted FY25 adjusted EBITDA of €649.5 million.
InvestingPro Insights
As Birkenstock Holding plc (NYSE: BIRK) continues to impress with its financial performance, the latest data from InvestingPro provides additional context for investors considering the stock. With a market capitalization of $10.48 billion and a high P/E ratio of 101.15, reflecting its growth potential and market confidence, Birkenstock stands out in its sector. Its gross profit margin for the last twelve months as of Q1 2024 is particularly strong at 61.91%, reinforcing Stifel's positive outlook on the company's profitability.
InvestingPro Tips highlight that Birkenstock is expected to see net income growth this year and maintains impressive gross profit margins. Furthermore, the company's liquid assets exceed its short-term obligations, indicating a healthy liquidity position. For investors looking to delve deeper into Birkenstock's financials, InvestingPro offers 14 additional tips on its platform. Readers of this article can use the promo code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, accessing comprehensive analysis and insights that could inform their investment decisions.
With Birkenstock trading near its 52-week high and analysts predicting profitability, the company's stock is showing significant returns with a 24.68% increase over the last month. Such performance aligns with Stifel's raised price target and may indicate a continuing upward trajectory for Birkenstock's shares.
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