JPMorgan raises Burberry target on forex moves
Shares in Burberry were on the rise on Thursday in London on the back of bid speculation, while JPMorgan Cazenove gave the stock an extra boost by lifting its target price from 1,470p to 1,560p.
Burberry Group
1,188.50p
16:50 14/05/24
FTSE 100
8,428.13
17:00 14/05/24
FTSE 350
4,631.25
17:09 14/05/24
FTSE All-Share
4,583.23
17:14 14/05/24
Personal Goods
16,533.64
17:09 14/05/24
The US bank's move came ahead of the fashion house's sales figures due on 15 April for the full year ended March 2015.
It forecasts a 9% increase in reported sales for the year, up 12% on an underlying basis, to £2.54bn.
Underlying growth in retail sales are forecast to come in at 12% for the fourth quarter alone, including like-for-like growth of 7%, though this would mark a deceleration from the 15% and 8% growth rates seen in the third quarter respectively.
"We expect a sustained tough environment in HK and Macau and strength in Europe and the US (albeit at a lower pace in the US)," the bank said.
Nevertheless, JPMorgan has lifted its earnings estimates for the luxury group by around 5% for the next two years due to the positive impact of Burberry's sourcing in euros.
"This benefit may have been somewhat overlooked by the market (Burberry has underperformed meaningfully European peers year-to-date) although it could, to a large extent, be erased by possible price adjustments, in particular possible price cuts in Asia Pac, and if the pound were to weaken versus the euro," the bank said.
JPMorgan maintained a 'neutral' rating on Burberry's shares.
The stock was up 3.7% at 1,807p by 10:07.