Jefferies thinks that Burberry (LON:BRBY) is still facing a number of challenges as it struggles with online and a new creative director, Citywire has reported. The comments come after the luxury goods retailer recently appointed former Givenchy director Riccardo Tisci to replace Christopher Bailey as a chief creative officer, with the company’s new chief executive looking to shift the group’s focus further upmarket.
Burberry’s share price rose in the previous session, finding support in upbeat results by luxury goods peer LVMH. The stock closed 1.36 percent higher at 1,715p, outperforming the broader UK market, with the benchmark FTSE 100 index ending the session one percent higher. The group’s shares have lost 2.6 percent of their value over the past year, as compared with about a one-percent dip in the Footsie.
Jefferies sees Burberry as ‘hold’
Jefferies reiterated its ‘hold’ rating on Burberry yesterday, while lifting its price target on the shares from 1,650p to 1,700p.
“We continue to see challenges including the impact of the new creative director, weak digital footprint, confusing elevation process, and still poor sales metrics,” the broker’s analyst Flavio Cereda pointed out, as quoted by Citywire, adding that while the blue-chip retailer’s strategy was ‘fuzzy,’ the positive included “a likely greater focus on 'the process' now all key appointments are in place, and ongoing solid cashflow profile”.
Other analysts on luxury goods retailer
Goldman Sachs reiterated its conviction-buy rating on Burberry last week, without specifying a price target on the stock, while Barclays remains ‘overweight’ on the luxury goods retailer, valuing the shares at 1,800p. According to MarketBeat, the company currently has a consensus ‘hold’ rating and an average price target of 1,677.78p.
Burberry is scheduled to update investors on its full-year performance on May 16.