Burberry Group PLC (LSE:BRBY) shares have been marked 2.2% lower after Morgan Stanley (NYSE:MS) cut its price target for the luxury goods retailer.
In a note covering the European luxury goods sector, the investment bank reduced targets across the board, with Burberry’s moving to 2,200p from 2,400p.
Morgan Stanley (NYSE:MS) lowered its second-quarter financial year 2024 like-for-like growth forecast to 4% from 7% previously to take account of softening global demand and heightened macro pressure.
It cut its financial year 2024 EBIT forecast by 2% to £608 million from £624 million before.
The lower estimates and a higher weighted average cost of capital (9% vs. 8.5% previously) prompted the price target change.
The bank said it would remain selective in its approach to the sector, staying 'overweight' LVMH, upgrading Prada to 'overweight' but downgrading Richemont to 'equal weight'.
“Next year, we expect growth to decelerate to around +4%, with Chinese nationals accounting for nearly all the industry growth, as spend by Europeans turns negative in 4Q23 and remains so for most of 2024,” the bank said.