RBC Capital downgrades Dr Martens, slashes price target

RBC Capital Markets downgraded shares of iconic bootmaker Dr Martens on Tuesday to ‘sector perform’ from ‘outperform’ and slashed the price target to 180p from 230p as it said FY24 guidance may prove too optimistic.

"Whilst we view the longer-term growth potential for DOCS as attractive, we are mindful of nearer term challenges particularly for the US market (37% revenues), which do not appear to be adequately reflected in company FY24E revenue guidance or consensus," it said.

"Share price performance and our DOCS call has not been the best up to now, and for a variety of reasons (de-rating, UK exposure, US DC execution) however we see the potential for further deceleration/earnings downside," RBC added.

The bank said it was lowering estimates by 8%/9% for FY24E revenue/earnings per share and sits 8%/4% below consensus.

At 0925 BST, the shares were down 2.9% at 155.80p.