Credit Suisse has lowered its rating on Burberry (LON:BRBY), arguing that the company is ‘lacking near-term catalysts,’ Web FG News reports. The move came after the group’s new creative director Riccardo Tisci recently presented his first collection for the luxury goods retailer.
Burberry’s share price has fallen deep into the red in today’s session, having given up 1.39 percent to 1,984.00p as of 14:21 BST, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.31 percent lower at 7,466.95 points. The group’s shares have added more than 11 percent to their value over the past year, as compared with about a 2.3-percent gain in the Footsie.
Credit Suisse trims retailer’s rating
Credit Suisse lowered its rating on Burberry from ‘outperform’ to ‘neutral’ on Friday, and trimmed its price target on the shares from 2,200p to 2,100p. WebFG News quoted the analysts as commenting that with the group’s share price up 40 percent since February’s lows mainly due to the appointment of creative director Riccardo Tisci “and the absence of bad news,” the shares were now trading close the new target price.
The broker elaborated that Burberry “can be a successful turnaround,” with a new management team, a new creative director and a cost savings programme underway, while also cautioning that the stock was lacking long-term catalysts following a year of changes.
More challenging environment
Credit Suisse further reckons that the blue-chip retailer “may be against a more challenging environment for luxury goods than two years ago,” with analysts starting to see “signs that would suggest the momentum in luxury goods demand may fade” from the second half of the year.
Burberry is scheduled to update investors on its interim performance on November 8.