Societe Generale downgrades Burberry target price and revenue estimates
Societe Generale cut its price target for Burberry to 1,750p from 1,850p following the company’s full-year results on Wednesday.
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It pointed to Burberry’s announcement that earnings in the 12 months through March will be around £40m less than previously estimated due to the recent strength of sterling.
SocGen lowered its forecasts at the sales and EBIT levels for 2016 and the coming years.
Given the downgrade to earnings expectations and an unchanged 16.3% retail/wholesale earnings before interest and tax margin this year, Societe Generale estimates that at current FX, group sales will stand at around £2.266bn, which is materially slower than last year.
SocGen’s previous estimate for 2016 revenues was £2.79bn. It also cut its 2017 estimate, to £2.86bn from £3.0bn.
Burberry is rated at ‘hold’.