Luxury Goods Sell-Off Presents Opportunity

Morningstar analysts say luxury sector valuations have improved as fears over Chinese consumer confidence have weakened share prices of firms like Burberry

Jelena Sokolova 12 October, 2018 | 12:17PM
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Burberry Shoppers in China

Shares in FTSE 100 fashion retailer Burberry (BRBY) fell this week amid concerns over waning Chinese consumer confidence and the ongoing effects of Beijing’s crackdown on the gifting of luxury goods to officials.

While the luxury sector has been battered over the past few days, Morningstar analysts are maintaining their fair value estimates for the firms in this space. We believe the sector valuations are now returning to more palatable levels, after being materially overvalued for most of 2018.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Burberry Group PLC1,836.50 GBX-1.92Rating

About Author

Jelena Sokolova  is an equity analyst for Morningstar