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Boot Barn (NYSE:BOOT) has been upgraded to a ‘Buy’ rating from ‘Hold’ by Jefferies analysts, who cited a significant reset in valuation alongside resilient business fundamentals and continued long-term growth opportunities.
Jefferies set a price target of $195 on the retailer of western and work-related footwear. Shares of Boot Barn traded up almost 9% at about $147 on Monday afternoon.
The upgrade follows a notable compression in the company’s valuation multiples. According to Jefferies, Boot Barn’s forward price-to-earnings ratio has declined from approximately 24 times earnings to around 16 times, while its EV/EBITDA multiple has fallen from about 15 times to 10 times. The firm noted that its prior downgrade in July 2025 had been driven primarily by valuation concerns rather than a deterioration in underlying performance.
Despite broader macroeconomic uncertainty, particularly concerns that rising gas prices could pressure consumer spending, Jefferies wrote that Boot Barn has maintained steady execution. The company continues to deliver consistent top-line growth, supported by new store openings and stable demand trends.
The broader specialty retail sector has faced multiple compression in recent months, with average forward P/E ratios across Jefferies’ coverage declining by roughly 26% since the start of 2026 and about 32% from peak levels.
The analysts attributed part of this decline to investor caution around consumer health, even as some retailers prepared for stronger spending tied to tax refund season.
Within this environment, Jefferies views Boot Barn as relatively insulated. The company generates approximately 41% of its sales from exclusive brands, which carry margins roughly 1,000 basis points higher than third-party products. Increased penetration of these private-label offerings has contributed to margin expansion and stability over time.
In addition, Boot Barn’s long-term store expansion strategy remains a key growth driver. The company currently operates around 500 locations and has the potential to grow to approximately 1,200 stores, representing mid-teens annual unit growth. The analysts believe this expansion could provide scale benefits that help offset potential margin pressures.
Supply chain positioning was also highlighted as a supportive factor. Jefferies noted that about 89% of Boot Barn’s sales are generated in-store, and the company is shifting sourcing for its exclusive brands toward Mexico.
By the end of fiscal 2026, roughly 35% of such merchandise is expected to be sourced from Mexico, compared with about 12% from China, potentially reducing exposure to tariffs and freight cost volatility.
The recent share price decline, driven in part by softer near-term data and broader consumer concerns, was described as creating a more attractive entry point for investors. While Jefferies acknowledged some near-term risks, including conservative fiscal 2027 guidance, it believes the current valuation better reflects those uncertainties.
Looking ahead, the firm expects modest upside to earnings and has raised its fiscal 2028 earnings per share estimate to $9.85, slightly above consensus forecasts. Its $195 price target is based on a blended valuation approach, incorporating both earnings and EBITDA multiples.
“Despite macro fears, and following the sell-off, we see more favorable risk‑reward from here, with upside to earnings and the stock,” Jefferies wrote.