Burberry Gets a Buy Rating From Citi for First Time in 17 Years
A Burberry Group Plc analyst who's had a neutral rating on the struggling luxury-goods stock since the Global Financial Crisis has turned positive for the first time since 2008.
Citigroup Inc.'s Thomas Chauvet upgraded his recommendation to buy on Thursday, saying that 'potential rewards now outweigh the risks.' Burberry shares rose as much as 4 percent.
The stock has been in the doldrums since hitting a record high two years ago, sliding about 70 percent in that time as the brand struggled to push more upmarket. A broader drop in demand for pricey items also weighed, and Burberry lost its place in the UK's FTSE 100 Index last year.
'Whilst patience is needed, potential rewards now outweigh the risks, considering the company's significant transformation potential over the next three years,' Chauvet wrote in a note. He expects the 'Burberry Forward' strategy implemented by new chief executive officer Joshua Schulman to bolster brand visibility and desirability.
After an encouraging update in January, analysts will be seeking more proof of revival when the company next reports on May 14.
By Kit Rees
Learn more:
Report: Burberry Is Looking for Its Next Chairman
Burberry is evaluating potential candidates to succeed Gerry Murphy as chairman, Sky News reported Tuesday.
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