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UBS raises Boot Barn stock target, maintains buy rating

EditorAhmed Abdulazez Abdulkadir
Published 05/18/2024, 04:57 PM
BOOT
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On Friday, UBS has increased its price target for Boot Barn (NYSE:BOOT) Holdings Inc (NYSE: BOOT) shares to $140.00, up from the previous target of $108.00, while keeping a consistent Buy rating on the stock. The adjustment reflects a shift in valuation as the company enters a new fiscal year.

The new price target is based on approximately 19 times the firm's forecasted $7.25 earnings per share for the fiscal year 2027 (FY27E). This is an increase from the earlier price target, which was based on roughly 17 times the estimated $6.25 earnings per share for fiscal year 2026 (FY26E). The advancement of the valuation to FY27E from FY26E has allowed the use of a higher earnings per share base for the price target.

Additionally, UBS has decided to increase the price-to-earnings (P/E) multiple used to value Boot Barn's stock by two points to around 19 times. This decision was driven by a perception of reduced macroeconomic risks and a stronger conviction that the company's comparable sales trends are likely to continue improving.

The analysis by UBS suggests that a 19 times P/E multiple and a $140 price target would align Boot Barn's valuation with its industry peers when considering metrics such as price-to-earnings, price-to-sales, and free cash flow yield, as illustrated in their report. Previously, the near 17 times P/E multiple was also deemed to be in line with the valuation of peer companies.

InvestingPro Insights

Following UBS's updated price target for Boot Barn Holdings Inc (NYSE: BOOT), it's worth examining some key metrics and insights from InvestingPro to further understand the company's financial health and market performance. Boot Barn's market capitalization stands at $3.4 billion, and it operates with a moderate level of debt, indicating a stable financial position. The company's P/E ratio has been adjusted to 22.86 for the last twelve months as of Q4 2024, aligning with UBS's valuation approach.

An InvestingPro Tip worth noting is that Boot Barn has experienced a significant return over the last week, with a 7.65% price total return, and a robust 23.2% return over the last three months. These figures suggest a strong short-term performance which may be indicative of positive investor sentiment and market trends. Moreover, analysts predict the company will be profitable this year, a sentiment echoed by its recent profitability over the last twelve months.

For those considering deeper analysis, InvestingPro offers additional tips on Boot Barn, including insights into cash flow, liquid assets, and long-term performance trends. To access these insights and more, visit https://www.investing.com/pro/BOOT and take advantage of the special offer using coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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