Birkenstock hit with Goldman Sachs downgrade

Birkenstock (BIRK) shares have been downgraded by Goldman Sachs to Neutral from Buy. Analysts at the firm explain the move by pointing to elevated valuations and fragmentation within the shoemaker's consumer base.

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This post was written by Angel Smith

Video transcript

All right, let's take a look at another ticker that we are watching today, consumer name and that is Birkenstock cut to neutral by Goldman Sachs.

Attributing the downgrade to some of those rich valuations.

Now, this comes after the retailer reported earnings that beat on both the top and the bottom line.

Goldman though, pointing to some fragmentation in the overall market as a headwind.

We're still though looking at gains on the day up just about 9/10 of a per sample and they talk about valuation.

I think it's good to take a look at some of those longer term charts when you see the price action, the price movement of what we have seen in recent weeks.

Yes.

At Birkenstock, it did come out and be.

It's right there.

The three month chart, you're looking at a gain of nearly 27%.

You can see a lot of that excitement coming within just the last month alone.

You take a look at the max chart ever since it went public there less than a year ago, up just about 48%.

So we'll see how this all plays out and how big of a risk some of that pulling back, weakening of the consumer is going to pose here to a name like Birkenstock.

Yeah.

Perhaps a cautious to, because of the degree of those gains that you pointed out.

Shaw.

I think that that's just the, the main picture here because they did point out in the note a lot of positives for the, for the name.

They talked about the kind of diversification, they found a way to sell a closed toe shoe, which is an incredibly bullish signal.

Apparently for Birkenstock, they were worried about the kind of non summer months being a headwind for them.

So I'm just amazed that these shoes are still so popular.

It still reminds me of high school, but people love them.

They've been wearing them the whole time.

We have some people in our newsroom who still saying that they have held on to their Birkin socks from their high school days.

So, I don't know, I'm not convinced, but a lot of people love them.

You can clearly see it reflected in the sales numbers that they put up.

Right.

We need a shopping trip.

That's what that tells me.