Burberry’s results were “satisfactory” to analysts at the Royal Bank of Canada (TSX:RY) but 2024 forecasts and a dampening sentiment are being reflected in the share price, down 7% since last Thursday.
RBC kept its target price of 2,400p, while also maintaining its sector perform rating on the stock.
According to the broker, a lack of significant beat and guidance of mid-single digit underlying earnings (EBIT) and high single-digit earnings per share downgrades are behind the falling share price.
“Key question will be to what extent can Burberry sustain higher revenue growth/profit in the coming quarter, ahead of new designer products due for late 2023/ early 2024,” the broker said.
Last week, the British fashion house reported an uptick in full-year profits as its fourth-quarter sales rebounded thanks to the easing of coronavirus pandemic restrictions in China.
Burberry also said it planned to return £400mln to shareholders by way of a buyback.