Bernstein SocGen Group has reaffirmed its Market Perform rating on Birkenstock Holding plc (NYSE:BIRK), retaining a $50.00 price target that the firm says is consistent with InvestingPro’s Fair Value calculation. The shares are changing hands near $39.80, a level that both the analyst house and proprietary valuation tools interpret as implying some upside from current prices.
The firm highlights a seeming tension between the company’s near-term valuation and its growth outlook. Birkenstock currently trades at a 15.5x next-twelve-months price-to-earnings ratio while guiding to at least 13% annual earnings per share growth through 2028. From Bernstein SocGen’s perspective, that valuation looks conservative when viewed alongside the company’s reported metrics - including a PEG ratio of 0.22 and gross profit margins of 58.7%.
Despite those figures, Bernstein SocGen says investors appear to be treating Birkenstock as if it were a maturing footwear business that has already run most of its course. The firm suggests that market participants are discounting the company’s present brand strength and its ability to realize full-price selling, instead focusing on the potential for weaker sell-through and inventory-related pressures.
On forward estimates, Bernstein SocGen’s fiscal 2026 earnings per share projections are largely unchanged, while the fiscal 2027 EPS outlook has been lifted by 2%. The firm continues to apply a relative valuation approach, using a target multiple equal to 1.3x the MSCI Europe price-to-earnings ratio - a benchmark that translates to roughly an 18x P/E for Birkenstock under their framework.
InvestingPro data cited by the firm underscores Birkenstock’s liquidity position, with a current ratio of 3.13 that indicates liquid assets comfortably exceed short-term liabilities. Bernstein SocGen notes that its forecasts are consistent with the company’s fiscal 2026 guidance and fall slightly below the company’s own fiscal 2028 targets. The analysts characterize their own projections as giving management the benefit of the doubt while keeping a valuation that reflects uncertainty around that guidance.
The Market Perform rating encapsulates Bernstein SocGen’s view that current market valuations are driven by investor concerns about the brand’s momentum, rather than the company’s near-term profitability metrics.
In operational results disclosed recently, Birkenstock reported Q1 2026 earnings per share of $0.27, ahead of an expected $0.26. Revenue for the quarter reached 402 million, a figure described as slightly below expectations. The earnings beat alongside modest revenue shortfall prompted a pre-market decline in the stock, a market reaction the firm interprets as cautious investor sentiment despite the positive earnings surprise.
Bernstein SocGen’s note and the company’s initial-quarter results together present a picture of a company with solid margins and liquidity that nonetheless faces investor scrutiny over brand durability and inventory execution. Market participants and analysts will be monitoring forthcoming quarterly updates and management commentary for signals on sell-through trends and the companys ability to sustain full-price sales.
Summary
Bernstein SocGen reaffirmed Market Perform on Birkenstock with a $50 price target. The firm emphasizes a discrepancy between conservative market valuation and the companys growth guidance, strong margins, and modest PEG ratio, while flagging investor concerns around brand momentum and inventory risk.
Key points
- Bernstein SocGen keeps a Market Perform rating and a $50.00 price target for Birkenstock (NYSE:BIRK); shares trade around $39.80.
- Valuation metrics appear muted versus guidance - 15.5x NTM P/E alongside projected 13%+ annual EPS growth through 2028, PEG of 0.22, and 58.7% gross margins.
- Q1 2026 results: EPS $0.27 (vs. $0.26 expected) and revenue 402 million, slightly below forecasts; stock fell in pre-market trading.
Risks and uncertainties
- Brand momentum - Investor skepticism about the sustainability of Birkenstocks brand strength could compress multiples and limit upside; this affects the consumer discretionary and footwear retail sectors.
- Sell-through and inventory - Concerns over product sell-through and inventory levels could pressure near-term results and cash flow, with implications for retail distribution and supply chain management.
- Guidance execution - Uncertainty around management guidance leaves valuations sensitive to updates, influencing equity investors and market sentiment in consumer staples and retail segments.
Tags: Birkenstock, Retail, Footwear, Consumer, Stocks