Royal Bank of Canada has lifted its valuation on Burberry (LON:BRBY), while continuing to see the group as an ‘underperform’. The move comes after the blue-chip retailer recently updated investors on its full-year performance, posting a rise in profits and announcing a share buyback.
Burberry’s share price has been little changed in London in today’s session, having inched 0.1 percent higher to 2,012.00p as of 10:33 BST. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index having fallen into the red and currently standing 0.76 percent lower at 7,817.68 points.
RBC lifts valuation on Burberry
RBC, which has an ‘underperform’ rating on Burberry, lifted its price target on the luxury goods retailer from 1,600p to 1,750p yesterday. WebFG News quoted the analysts as saying that with retail like-for-like growth remaining below that of opex inflation, cost savings were protecting short-term profitability at the blue-chip retailer.
The broker further noted that investors might also be willing to let pass further pedestrian performance from the group as they wait for the first collection of its new creative director Riccardo Tisci in February next year.
The newswire notes that while Tisci was seen as the key reason the market continued to view Burberry as a glass half full situation, RBC questioned whether that patience would hold out if the group continued to underperform throughout the first half of 2019.
Other analysts on retailer
Citigroup reiterated its ‘neutral’ rating on Burberry last week, with a price target of 1,970p on the shares, while Berenberg, which sees the retailer as a ‘buy,’ boosted its valuation on the stock from 1,865p to 2,100p. According to MarketBeat, the luxury goods group currently has a consensus ‘hold’ rating and an average price target of 1,749.82p.