Burberry Group PLC (LSE:BRBY) shares fell 3% to 1,052p on Wednesday after HSBC downgraded the British luxury fashion group to ‘hold’ from ‘buy’, taking a more cautious view of the stock.
The bank's more cautious stance reflects softer momentum across the luxury sector, with the bank highlighting near-term challenges in soft luxury and muted trends that could limit investor appetite for the sector.
Analyst Anne-Laure Bismuth cut the recommendation after previously rating Burberry ‘buy’, signalling reduced conviction in the company’s prospects.
The downgrade comes as investors assess whether Burberry can sustain its recent recovery and deliver sufficient growth to support its share-price performance.
HSBC’s revised stance suggests the broker sees a more balanced risk-reward profile for the shares following their previous gains.
Burberry has been working to revive its performance in a challenging luxury market, with investors closely watching sales trends, margins and the pace of its recovery.
The downgrade came as part of a wider assessment of the luxury goods sector by analysts at HSBC.
