Burberry Group Plc’s biggest bear just became even more negative on the stock following Wednesday’s lacklustre results from the British luxury firm.
UBS Group AG analyst Zuzanna Pusz cut her price target to 750 pence from 971 pence, implying a decline of a third in the stock over the next 12 months, to what would be the lowest since 2010.
“The likelihood of a successful Burberry turnaround is limited in the near term,” Pusz wrote in a note on Thursday, reiterating her sell recommendation.
The analyst pointed to Burberry’s commentary on current trading, weak wholesale guidance for the first half of the current fiscal year, as well as a continued focus on cutting costs, rather than investment.
The British group’s shares fell more than 7 percent on Wednesday after it warned of a challenging first half as soft demand in China and the US cause a drop in sales. A revamp of the business is yet to yield results, with the shares down about 20 percent year-to-date following a surprise profit warning.
Pusz turned bearish on Burberry in October after being neutral-rated on the stock for almost two years. Overall, Burberry has only two buy ratings, along with 17 holds and four sells, according to data compiled by Bloomberg.
By Kit Rees
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