Jefferies has kicked off coverage of Burberry (LON:BRBY) with a ‘hold’ rating, noting that while the retailer may be ‘unique,’ its rebranding phase is likely to take time, Citywire reports. The comments come as the luxury goods retailer’s new chief executive looks to shift the company further upmarket, with the move set to trigger higher restructuring costs.
Burberry’s share price has gained ground in London in today’s session, having added 0.22 percent to 4,041.00p as of 12:27 GMT. The shares are outperforming the broader UK market, with the benchmark FTSE 100 index having slipped into the red and currently standing 0.31 percent lower at 7,467.23 points. The group’s shares have lost nearly four percent of their value over the past year, as compared with about a five-percent rise in the Footsie.
Jefferies sees Burberry as ‘hold’
Jefferies initiated coverage on Burberry with a ‘hold’ rating yesterday, with a price target of 1,650p on the shares.
“While we recognise Burberry’s unique standing as the sole British luxury brand of size, we also acknowledge its prolonged underperformance and that its current ‘rebranding’ phase will take time to finalise with important risk elements attached to it,” the broker’s analyst Flavio Cereda commented, as quoted by Citywire.
The move came after the FTSE 100 retailer posted its third-quarter results last month, unveiling a drop in sales amid weak performance on both sides of the Atlantic.
Other analysts on retailer
Morgan Stanley, which sees Burberry as an ‘equal weight,’ lowered its price target on the shares from 1,676p to 1,600p last month, while JPMorgan Chase & Co reiterated its ‘neutral’ stance on the company valuing the stock at 1,720p. According to MarketBeat, the luxury goods retailer currently has a consensus ‘hold’ rating and an average price target of 1,694.44p.