UBS, the Swiss bank, has cut its price target on Burberry to 1,320p from 1,425p while keeping its 'buy' rating on the British luxury fashion group.
The new target is 7% lower, but it still implies about 31% upside from the 1,011p at which the shares closed on 2 October.
Analyst Zuzanna Pusz has trimmed earnings per share forecasts by 6% for each of the next three financial years.
She has also cut sales estimates by 1% to 2% to reflect slowing demand across the luxury sector, which she thinks Burberry cannot entirely escape.
For the year to March 2028, UBS now expects like-for-like retail sales growth of 5%, down from 6% (like-for-like strips out the effect of new and closed stores).
Burberry reports half-year results on 12 November, and UBS forecasts sales of £1,087 million, up 5%, or 4% at constant currency.
It expects retail like-for-like growth of 4% in the second quarter, easing slightly from the first, with wholesale sales up 7% at constant currency.
Profit is likely to be weighted towards the second half, with a first-half gross margin of 67.7% and operating profit of £39 million.
Pusz said Chinese customers drove growth last quarter, with mid-single-digit gains while most peers were flat.
The bank forecasts operating profit of £351 million in the 2028 financial year, equal to a 13.2% margin.
The debate is now whether sales can grow fast enough to deliver operating leverage once cost savings and gross margin gains fade.
UBS said the cost programme is largely complete this year, so further profit recovery depends on the top line.
It argues the market still doubts the durability of the turnaround, with Burberry trading at a 55% discount to the luxury sector on enterprise value to sales.
On UBS's numbers, the shares trade on a 2027 price/earnings to growth ratio of about 0.7, against about 2.0 for luxury peers.
