Birkenstock Holding Plc, a German shoe manufacturer, is gaining favor among Wall Street analysts who believe its shares are a good addition to investor portfolios. Despite a lackluster initial public offering (IPO) where the company’s stock traded down about 10% from its IPO price, analysts are recommending investors to buy the shares now that the customary quiet period for firms participating in the IPO is ending.

According to data from Bloomberg, Birkenstock has received 11 buy recommendations, seven holds, and zero sells. Analysts have set an average price target of $46.51 for the next 12 months, which represents a 13% increase from its previous closing price of $41.16. This target aligns with the IPO price of $46.

Simeon Siegel, an analyst at BMO Capital Markets, describes Birkenstock shares as a “comfortable investment” and rates it as outperform. He believes the company has growth potential through its core product offering, product extensions, and geographical expansion. Piper Sandler analysts, Edward Yruma and Abbie Zvejnieks, also remain optimistic about Birkenstock, stating that the company is well-positioned to benefit from fashion trends, wellness, and craftsmanship, which are expected to be key drivers of growth in the coming year. They highlight the unique characteristics of Birkenstock as a luxury and performance footwear brand, differentiating it from competitors.

However, not all analysts share the same level of optimism. Morgan Stanley analysts, led by Edouard Aubin, acknowledge the company’s industry-leading profitability and expanding free cash flow but believe these positives are already reflected in the stock price. Consequently, they have given it an equal-weight rating. HSBC Holdings Plc analyst, Erwan Rambourg, praised Birkenstock’s fundamentals but noted the lack of exposure to China as a positive given the current economic climate. Rambourg cautioned that the stock’s valuation does not appear compelling at its current levels, leading him to rate it as a hold.

In summary, despite a less-than-ideal trading debut, analysts remain optimistic about Birkenstock’s long-term prospects. The company’s strong fundamentals and unique market positioning make it an appealing investment option. With opportunities for growth through various avenues, Birkenstock is being seen as a solid fit for investor portfolios.

Useful links:
1. Wall Street Analysts Recommend Birkenstock Stock
2. Birkenstock Share Price Drop Analysis