This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Trade Parameters
Technical Observations – For
Technical Observations – Against
Bullish breakout above July highs, with the shares pushing new record highs. New management team is hoping to revitalise the brand by presenting first new collection in September with higher emphasis on luxury higher-margin products. Analysts at Hargreaves Lansdown (11 July) say the latest sales growth and outlook under new CEO are impressive, with new creative impetus pushing the brand higher. Softer UK retail demand is being offset by continuing growth in Asia Pacific and the Americas, with company seeing improved trends in Q4 2018.
Risks to Burberry include the failed launch of the new collection in September, poor UK retail sales extending to other regions, disappointing upcoming results, FX headwinds, as well as failure to deliver promised cost savings.
Brokers are taking a neutral wait-and-see attitude toward Burberry, with 63% of analysts saying either “Buy” or “Hold”, while a not-insignificant 37% are saying “Sell”. The latest bullish breakout could induce the currently neutral brokers to upgrade their recommendations, as well as price targets, with the current medium-term target of 1958p sitting below current market levels.
Next Event: London Fashion Week, 17 Sept; H1 Results, 8 Nov
Latest Broker 12-Month Consensus: 17% Buy, 46% Hold, 37% Sell (full breakdown on request)
Source: DowJones Newswires, Reuters News, Bloomberg or Company Press releases
| Share | 1wk | 1m | 3m | 6m | 1yr | 2yr | 3yr | 4yr | 5yr |
| Perf % | 5.0 | 6.2 | 24.5 | 49.0 | 27.0 | 68.3 | 38.9 | 55.6 | 44.2 |
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Prepared by Michael van Dulken, Head of Research