Barclays Downgrades Dr. Martens to Underweight

Barclays has downgraded Dr. Martens (LON: DOCS), the boot and shoe brand, to underweight from equal weight and cut its price target to 60p from 75p, Investing.com reported. Underweight is a broker rating that means it expects the stock to lag the market.

The shares were at 64.2p at 08:59 London time today, down 2.2% from Friday’s close of 65.6p. They have now slid about 27% from the August peak close of 88.5p, set on 13 August.

Barclays said weak brand demand and a challenging consumer backdrop put the recovery at risk going into Christmas. Evidence includes subdued year-on-year Google search interest in Dr. Martens in major markets, including the UK and the US.

The 20% target cut leaves 60p, about 8.5%, below Friday’s close. Barclays also pointed to heavy discounting, meaning retailers are cutting prices to clear stock across footwear, with industry inventory growing faster than sales. Dr. Martens’ own inventory is about 38% below its FY23 peak, but Barclays said the backdrop could make full-price sales harder to sustain.

Barclays called the share price multiple to earnings unattractive against peers, citing weaker brand search momentum, comparatively low EBITDA margins (a measure of operating profit) and recent earnings downgrades. Its forecasts are unchanged, but its pre-tax profit estimates sit 2% below Bloomberg consensus for FY27 and 7% below for FY28.

That sits against the company’s own case. On 19 May it reported FY26 pre-tax profit of £32.7m, up from £8.8m, though revenue fell 2.9% to £764.9m, and said it was entering a “scale phase” in FY27. Barclays accepted that range expansion into sandals and bags, better marketing and rebuilt wholesale relationships could support a recovery, but said evidence of stronger demand was not yet sufficient.

The next test is first-half results, scheduled for 12 November. With a bearish broker now on the other side of the turnaround story, the Christmas trading commentary in them is what the shares will turn on.