Wall Street analysts are split on Allbirds, including some major skeptics

Published Mon, Nov 29 20218:41 AM EST

Jesse Pound @/in/jesse-pound @jesserpound

Newly public shoe company Allbirds has received a tepid reaction from some of the biggest firms on Wall Street, but several others are bullish on the stock. The environmentally friendly shoe company went public earlier this month and had a massive first-day pop . However, the stock has sunk in recent weeks. On Friday, it closed below its initial trading level. Many Wall Street analysts on Monday initiated coverage of stock. The majority of analysts had positive outlooks on Allbirds, but there were some notable detractors. Morgan Stanley analyst Kimberley Greenberger initiated coverage with an equal-weight rating, saying in a note to clients that the company may struggle to hit long-term growth targets given its small product lineup. "BIRD's product appeal is primarily rooted in lifestyle, which may not give it "permission" to successfully expand into performance, though it has entered the category. And in BIRD's current state, one could argue it appears a single product company with a narrow customer base that disproportionately skews wealthier & older," Greenberger said in a note to clients. Similarly, JPMorgan analyst Matthew Boss initiated coverage with a neutral rating, citing some risks to the growth outlook. Boss also said in a note to clients that Allbirds deserved to trade at a premium to its peers but set a price target of $21 per share. That's just 6% above where the stock closed Friday. Bank of America analyst Lorraine Hutchinson was an exception among the major banks, initiating at buy and saying that Allbirds could be boosted by the ESG investing trend. "Allbirds' focus on sustainability will be a key differentiator both from a consumer and investor perspective. The uniqueness of sourcing sustainable materials (i.e. wool, tree, sugar cane) helps Allbirds stand out relative to peers and will likely continue to increase as consumers incorporate higher sustainability standards into products they buy," the note said. Other firms with positive ratings on Allbirds include Guggenheim, Stifel and Telsey Advisory Group. —CNBC's Michael Bloom contributed to this report.

A woman walks past an Allbirds store in the Georgetown neighborhood of Washington, D.C., on Tuesday, Feb. 16, 2021.

Al Drago | Bloomberg | Getty Images

Newly public shoe company Allbirds has received a tepid reaction from some of the biggest firms on Wall Street, but several others are bullish on the stock.