Burberry Upgraded by Analysts

Shares in the luxury clothes brand are upgraded, but Morningstar analysts believe they are still overvalued

Jelena Sokolova 29 August, 2018 | 2:48PM

Burberry Store

Morningstar equity analysts are increasing their fair value estimate for shares in luxury clothes brand Burberry (BRBY) to £17.90, below the current share price of around £23 a share, to reflect positive currency movements. The shares have a two-star rating, which means they are currently overvalued.

We now expect largely flat sales and profits in 2019 and 2020, in line with management guidance and driven by improvements to the distribution channel, which we see as the correct – although painful – step. We expect a return to growth thereafter to a slightly above-industry rate, driven by same-store and online sales and supported by product innovation across categories.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Burberry Group PLC1,675.00 GBX1.73

About Author

Jelena Sokolova  is an equity analyst for Morningstar

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