Wall Street mixed on Burberry as UBS upgrades, Deutsche Bank downgrades the stock

Vahid Karaahmetovic

Thu, May 15, 2025, 5:18 AM 2 min read

Investing.com -- Wall Street analysts are divided connected the outlook for Burberry (LON:BRBY) pursuing its latest quarterly results and strategy update.

UBS upgraded the banal to Buy from Neutral, raising its terms people to 1,400p from 918p. The slope cited a much focused strategy aligned with Burberry’s practice arsenic a cardinal crushed for turning positive.

UBS analysts said the renewed accent connected outerwear, practice styles, and much accessible terms points comes astatine a clip erstwhile luxury consumers are showing signs of fatigue.

“The weakness successful the luxury assemblage owed to constricted newness and stretched terms points, volition alteration marketplace stock gains astatine little incremental cost,” analysts led by Zuzanna Pusz, wrote, adding that this displacement underpins a projected net per stock (EPS) compound yearly maturation complaint (CAGR) of 85% done fiscal 2028 (FY28).

UBS present sees EBIT margins climbing backmost to ~16% by FY30, supported by stronger income forecasts, incremental cost-cutting, and the simplification of outlet exposure.

The slope values the banal utilizing a premix of discounted currency travel (DCF) and comparative endeavor worth (EV)/sales metrics, arguing the turnaround trajectory is underappreciated by the market.

“In our view, should the affirmative EPS momentum proceed BRBY shares look comparatively cheap, with 2026 PEG ratio of <1x, acold beneath luxury and sportswear sectors arsenic good arsenic premium apparel peers,” the analysts said.

In contrast, Deutsche Bank downgraded Burberry to Hold from Buy, contempt acknowledging aboriginal signs of marque recovery.

The slope raised its people to 1,000p from 900p, but warned that the betterment communicative has already been mostly priced successful aft a stronger-than-expected FY25 and upbeat absorption commentary.

Analyst Adam Cochrane noted that further upside would necessitate either cFX income maturation successful the treble digits oregon EBIT margins to transcend mid-teens guidance by 2028.

“This whitethorn beryllium feasible but much grounds that the occurrence successful the practice ranges tin beryllium carried crossed the remainder of the scope is required, successful our view,” helium wrote.

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