Morgan Stanley has lowered its price target on Birkenstock Holding plc (NYSE:BIRK) to $47.00 from $57.00 while retaining an Equalweight recommendation on the shares. The revised target still suggests over 22% upside from the prevailing share price of $38.39, with market data showing the stock trading close to its 52-week low of $36.89.
The adjustment comes as Birkenstock prepares for a company Command Day, an event Morgan Stanley analyst Edouard Aubin characterized as "an important catalyst" for the business. The footwear maker is scheduled to report quarterly results in approximately 16 days, with an earnings release expected on February 12.
Despite the reduced price objective, Morgan Stanley highlighted what it sees as enduring strengths in the brand, noting that Birkenstock "continues to exhibit several attractive structural features and has delivered a number of positive surprises since the IPO." Those strengths are reflected in select financial metrics: InvestingPro data show a gross profit margin of 59.18% and a Piotroski Score of 9, indicating robust profitability and balance-sheet performance.
At the same time, the firm said it remains cautious given "uncertainties around the medium term growth algorithm and the implications of the evolving distribution model." Morgan Stanley also indicated that it refreshed its internal estimates in connection with the price target adjustment, although the analyst report did not publish the specific revised projections.
Analyst sentiment across the sell side remains varied. InvestingPro reports a consensus recommendation of 1.57, positioned between Strong Buy and Buy, and a high analyst price target of $79.68. Separately, Birkenstock disclosed preliminary first-quarter revenue of 3402 million, in line with the Bloomberg Consensus estimate of 3401.8 million; the companys shares fell despite meeting that revenue expectation.
Other brokerages have also updated their views. Bernstein cut its price target to $50 from $55 and maintained a Market Perform rating. Williams Trading lowered its target to $49 from $51, kept a Hold rating, and revised its estimates to reflect foreign-exchange neutral growth assumptions. Seaport Global Securities began coverage with a Neutral rating and referenced the companys sustainable growth strategy. Additionally, Bernstein SocGen Group trimmed its price objective to $55 from $63, citing an anticipated deceleration in top-line and earnings-per-share growth.
Investors and market watchers will likely be focused on the upcoming Command Day disclosures and the February 12 earnings release for clues about how Birkenstock intends to navigate its distribution changes and medium-term growth trajectory. For now, the mix of strong margin metrics and high-quality financial scores sits alongside analyst caution, producing a range of price targets and ratings in the market.
Summary
Morgan Stanley reduced its price target on Birkenstock to $47 while keeping an Equalweight rating, noting both the brands attractive structural features and uncertainties around medium-term growth and distribution changes. The company is approaching a Command Day and an earnings report on February 12; preliminary revenue matched consensus but shares fell. Other analysts have adjusted targets and ratings, reflecting a cautious tone despite strong margin metrics.
Key points
- Morgan Stanley lowered its price target from $57 to $47 and maintained an Equalweight rating; the new target implies over 22% upside from $38.39.
- InvestingPro data show Birkenstock has a 59.18% gross profit margin and a Piotroski Score of 9, signaling strong profitability and financial health.
- Several other analysts updated targets or ratings: Bernstein, Williams Trading, Seaport Global Securities, and Bernstein SocGen Group issued revisions or initiated coverage with varied assessments.
Risks and uncertainties
- Uncertainty about the medium-term growth algorithm may affect revenue and earnings trajectories; this has implications for equity valuations in the consumer discretionary and retail sectors.
- The evolving distribution model presents execution risk, potentially impacting sales patterns, margins, and inventory dynamics within footwear and retail channels.
- Consensus estimates and analyst projections are in flux; differing price targets and ratings reflect uncertainty around top-line growth and EPS momentum, which could influence investor sentiment in consumer goods and retail equities.