Proactive Investors - Dr Martens PLC (LON:DOCS) investors will need to brace for lower earnings and a subdued share price over the next few years as it continues its shift to a direct-to-consumer model, analysts believe.
Barclays (LON:BARC) cut its earnings per share forecasts by 56% for the 2025 financial year and by 46% for the year after, following the retailer’s recent profit warning.
Last month, the group warned that sales of its iconic shoes would decline dramatically in the year ahead, with US wholesale anticipating a double-digit yearly decline.
Now, analysts at the UK lender believe a push to direct-to-consumer has resulted in the requirement of “significant infrastructure” which in turn leads to “increased costs and capital intensity”.
Barclays cut its share price target from 110p to 80p to reflect the changes, estimating little to no growth compared to its current market value.
Nevertheless, the bank sees some optimism in the brand, adding that consumer demand “has been somewhat encouraging”.
Looking at Google (NASDAQ:GOOGL) Trends and Similarweb data, analysts believe there are indications of brand resonance among consumers and that further improvements could lead to future upgrades.
Despite this, the bank said it would monitor the group’s execution of its direct-to-consumer push before taking a bullish or bearish stance.
“We cover other companies with better track records, stronger balance sheets, on lower multiples (vs. FY25E PE for DOCS of 23x) and accordingly we retain our equal weight rating,” Barclays said.