A lot of us simply do not consider Birkenstock (BIRK) when we think about shoes. Whether we simply do not see the brand enough or consider it out of our price range, Birkenstock often does not factor in. But—according to a report from CNBC—for Bank of America, it is a brand to consider, particularly for investors. Analyst reports put a whole new light on Birkenstock. Investors cared little, though, sending shares down over 2% in Friday afternoon’s trading.
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Bank of America, via analyst Lorraine Hutchinson—who has a nearly five-star rating on TipRanks—left the Buy rating in place on Birkenstock, and also notched up the price target from $70 to $73. That represents an upside potential of 26% against the closing price on Thursday.
So why bump up that price target? Hutchinson thinks that Birkenstock has a particular edge in the market these days, in that it has no Asian manufacturing connection. This keeps it off the firing line in terms of tariffs, at least for the most part. Reports noted that there would be a price hike on Birkenstock shoes to impact a tariff rate of 10% on imports coming in. But without Asian manufacturing, that would pull a lot of the impact out of the picture. Throw in a recent earnings report win for both revenue and earnings and Birkenstock looks pretty attractive.
Consider the Market
For fashionistas out there, this may be old news. But for investors, it could be a point to watch. Reports noted that Jennifer Aniston has made a pivot that could give Birkenstock a leg up. In fact, Aniston reportedly turned to Birkenstock to throw over a class of shoes she’s been wearing routinely since the 1990s: flip-flops.
Instead, Aniston has turned to Birkenstock’s Boston Clogs, which have been declared “one of the comfiest pairs of shoes in existence.” The clogs come in a range of colors and a few styles, and retail for around $165. While Aniston’s star power is arguably not what it once was, seeing this long-term celebrity throw over a long-time favorite in shoes should be enough to make some wonder about the appeal of the Birkenstock clog. That in turn might well yield sales and further improvement ahead of next quarter.
Is BIRK a Good Stock to Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on BIRK stock based on 13 Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 4.97% rally in its share price over the past year, the average BIRK price target of $66 per share implies 16.66% upside potential.
