Burberry: RBC raises target price; still 'underperform'.
(CercleFinance.com) - RBC Capital Markets has raised its target price on the stock Burberry Group from 1,550 pence to 1,600 pence , although is maintaining its "underperform" rating on the shares, saying that it is "still unconvinced" by the British luxury brand.
The Canadian broker points out that Burberry is going through a "transition phase" in its brand life cycle, which should lead to below sector-average earnings growth in fiscal year 2018/2019.
"Gross margin headwinds (due to euro strength) and the need to reinvest cost savings in brand elevation (especially in the US/Japan) and in digital (due to increasing competition) should put a lid on operating margins in the next 12 months," RBC warns in a research note sent to clients.
Copyright (c) 2017 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
The Canadian broker points out that Burberry is going through a "transition phase" in its brand life cycle, which should lead to below sector-average earnings growth in fiscal year 2018/2019.
"Gross margin headwinds (due to euro strength) and the need to reinvest cost savings in brand elevation (especially in the US/Japan) and in digital (due to increasing competition) should put a lid on operating margins in the next 12 months," RBC warns in a research note sent to clients.
Copyright (c) 2017 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.