Boot Barn Holdings Inc. BOOT, +3.46% was upgraded to overweight from neutral at JPMorgan after preliminary fiscal third-quarter earnings show that more casual fashion trends, accelerated during COVID-19, are driving sales of country and Western styles.
Boot Barn’s price target was raised to $60 from $46.
“Looking forward, we see potential acceleration of the Western category (70% of FY20 mix with 7% market share today of the $8B TAM [total addressable market]) tied to a ‘casualization’ tailwind post-pandemic,” wrote JPMorgan analysts in their note.
Boot Barn is also benefiting from work wear sales.
“[W]e want to remind the world, and, certainly, the financial community that our core customer is a very, very large segment of the U.S. population,” said Boot Barn Chief Executive James Conroy during this year’s ICR Conference, according to a FactSet transcript.
“They’re vibrant, they’re in stores, and the lifestyle of our customer is one that drives pickup trucks, listens to country music on the radio in their truck. They attend rodeos and Nascar events. They wear boots, hats, blue jeans, work wear virtually every day of their life.”
JPMorgan moderated the conversation with Boot Barn’s Conroy at the conference.
In the analyst note, JPMorgan highlights Boot Barn’s number one status in the $20 billion western and work wear market with 90% of sales at full price and 30% in the work wear category.
“Boot Barn retains among the best secular growth profiles in a normalized environment within our coverage (and across specialty retail) including opportunity to grow units +10% and EPS +20% annually with increasing scale benefits (including broad online representation) amid a fragmented industry,” wrote Baird analysts led by Jonathan Komp in a note.
Baird rates Boot Barn stock neutral but recently raised its price target to $52 from $37.
Cowen analysts led by Max Rakhlenko also raised their price target in a note published Tuesday, up to $65 from $47. Cowen rates Boot Barn stock outperform.
Analysts think Boot Barn is “operating without a single national competitor and only one regional competitor.” This gives the company a lot of room to expand.
“Boot Barn specializes in a high-ticket product that often requires an in-store visit given the need to try on boots for fit, style, and comfort. We believe the retailer can nearly double its store base over the next decade from ~264 to ~500.”
Boot Barn stock gained 3.5% in Tuesday trading, and has rallied 70.7% over the last three months. The benchmark S&P 500 index SPX, +0.04% is up 8.2% for the past three months.