Berenberg starts coverage on Dr Martens at 'buy'
Analysts at Berenberg initiated coverage on iconic bootmaker Dr Martens on Thursday with a 'buy' rating and 102.0p price target, noting that the business had both "global appeal and clear growth potential".
Berenberg said Dr Martens was a "distinctive footwear brand" with global relevance that stretches far beyond its workwear and counter-cultural roots in the UK.
"We estimate that slightly less than 18% of Dr Martens' total revenues are generated in the UK, where it has circa 1% share of the total footwear market," said the analysts. "On a global basis, we estimate that Dr Martens has only 0.0003% market share and we think that there is clear scope to build its presence further worldwide."
The German bank said the brand itself had "a high level of awareness", as 74% of consumers in the markets in which the company trades said they were aware of it, with brand awareness highest in the UK at 92%, versus 73% in the US and 53% in Japan.
"Dr Martens favours a direct-to-consumer approach but also values the wholesale distribution channel. The company's expansion from its current reach could include circa 15 new stores pa for DTC, together with new wholesale partnerships," said Berenberg, which also pointed out that large countries and regions such as India, South Africa and the Middle East represent "virgin territory" for the company.
Reporting by Iain Gilbert at Sharecast.com
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