Equities By Region Retail UK

Burberry share price: Credit Suisse points to lack of near-term catalysts

Share this article!

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.

As of 15:02 BST, Monday, 24 September, Burberry Group plc share price is 285.10p.

Add Comment

Investing is speculative. When investing your capital is at risk. This site is not intended for use in jurisdictions in which the trading or investments described are prohibited and should only be used by such persons and in such ways as are legally permitted. Your investment may not qualify for investor protection in your country or state of residence, so please conduct your own due diligence. This website is free for you to use but we may receive commission from the companies we feature on this site. Click here for more information.