Burberry Group PLC (LSE:BRBY) shares offer some 30% upside according to analysts at RBC Capital Markets, as the bank stuck with a bullish stance on the British luxury brand.
After full-year results from Burberry, RBC repeated an Outperform rating, a 1,400p price target, and called the brand its “preferred turnaround idea”.
Analysts said they remained positive on the “sequential and steady progress” at the company, with more to play for as key Autumn/Winter 2026 trading approaches and recent operational improvements bed in.
RBC lifted its FY27 organic revenue growth forecast to 4.7%, from 4.5%, and raised its gross margin estimate by 40 basis points to 68.4%. Adjusted EBIT for the year increased by 2% to £247 million, implying a 9.8% margin.
The broker said fourth-quarter revenue growth of 5% on a like-for-like basis was in line with consensus, while FY26 EBIT came in 4% ahead of market expectations. Gross margin of 67.9% was 140 basis points stronger than expected, while free cash flow of £141 million also beat RBC forecasts.
“Burberry is an attractive self-help transformation equity story, with the right building blocks largely in place,” RBC said, pointing to a credible leadership team and a strategy focused on British heritage, outerwear and accessories.
The broker said upside could come from a faster-than-expected earnings and margin rebuild, or from a higher terminal margin than the market is currently discounting against a difficult luxury-sector backdrop.
At current levels, RBC said Burberry trades at 31 times CY26E earnings, 15 times EV/EBIT and 1.4 times EV/sales, compared with the luxury sector excluding Hermès at 24 times, 16 times and 3.1 times, respectively.