Burberry Group PLC (LSE:BRBY) gained on Monday after being upgraded to a ‘buy’ rating by Deutsche Bank analysts.
Deutsche forecast 2025 to bring a turnaround in fortunes for the luxury sector as a whole, but also Burberry as it embarked on its own overhaul plan.
“After two years of luxury underperforming retail and sporting goods, we see this changing as the year progresses,” Deutsche said in a note.
Chinese consumer weakness was likely to be “cyclical rather than structural,” while potential tariffs under incoming president Donald Trump would be “less relevant” for the luxury sector.
“Burberry offers a credible luxury turnaround story with scope for robust earnings momentum and a significant change in investor perception,” Deutsche added.
The company last month signalled a return to its roots under a plan by chief executive Joshua Schulman to refocus on core products and ultimately cut losses.
Deutsche moved Burberry from a ‘hold’ to ‘buy’ rating as a result, adding the fashion house was among its “most preferred” in the luxury, sportswear and apparel sector.
Shares climbed 1.6% to 912.8p on Monday.