The Burberry Group PLC (LSE:BRBY) turnaround is gaining traction, according to Barclays, as the British fashion house “checked all the boxes” in last week's trading update, delivering a second consecutive quarter of positive retail sales growth, including a return to growth in China
Barclays analyst Carole Madjo, who upgraded the luxury group to 'overweight' and raised the price target to 1,450p, said the update strengthened confidence that CEO Joshua Schulman's Burberry Forward strategy is working.
Burberry is now seen as an “attractive self-help play for 2026”, with momentum building in both revenue and earnings.
Scope for further upside is seen too, with the analyst forecasting that 2027 earnings per share 4% above current market consensus.
Burberry is well placed to benefit from the return of “aspirational consumers” in the US and China, Madjo added, noting the brand’s relative affordability compared to rivals and signs of improving brand desirability, including stronger Google Trends data.
Cost savings and operating leverage were also flagged as likely to support margin expansion, with estimated EBIT margins for 2026 still below the group’s long-term average.
Shares in Burberry, which have fallen around 30 per cent over the past year, rose 1% to 1,190p in early trading.
Madjo felt the recent weakness in the shares was an opportunity for investors, as the more advanced stage of Burberry's turnaround plan "makes it more likely to see topline and EPS upgrades in 2026 versus other players, and the share price performance is still down c.50% vs the level of 3 years ago, back when the brand had revenue of £3 billion (vs £2.4 billion of revenue today as per our FY26 estimates)."
The recent pullback, with shares down 8% in the year to date, versus the STOXX 600 up 3%, was highlighted as "an entry point allowing further upside in 2026".