Burberry: UBS downgrades 'buy' rating.
(CercleFinance.com) - This morning UBS downgraded its buy rating on the share of the British luxury group Burberry, now adopting a "neutral" stance.
The broker has also cut its associated target price from 2,110 pence to 1,800 pence (-14.7%).
While the stock has risen by 20% year-on-year, analysts point out that Burberry has long been their best pick in the luxury sector. UBS has therefore played a role in improving the group's sales and capital position, along with making savings, while announcing a convincing new strategy. Its organic growth should therefore accelerate.
"However," argues UBS' research report, "the costs (both opex and capex) to do this will be higher, and for longer, than we expected," its report states - as a result, UBS is cutting its earnings estimates for the group.
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