Burberry Group PLC (LON:BRBY) has had its target price cut to 1,750p from 1,900p by analysts at Jefferies as the broker said the luxury clothing make will be “disproportionality impacted” by the coronavirus outbreak.
In a note on Friday, analysts said the FTSE 100 firm was “one of the more exposed brands” to the crisis, which has infected nearly 75,000 people and killed over 2,100, mostly in mainland China.
READ: Burberry shuts over a third of China stores amid coronavirus disruption
Earlier this month, Burberry said it had shut over a third of its stores in the country as a result of the outbreak, while the rest have seen “significant” declines in customer footfall.
Analysts said the company’s exposure to Asia, which accounted for 40% of its revenues last year, implied “a greater risk” to its income due to the large local presence.
The fact that the company also sources many of its products from mainland China was expected to cause “further issues” down the line as its supply chain was disrupted.
Jefferies retained its ‘underperform’ rating on the stock and cut its fourth quarter retail estimates by 26% to £413mln as a result of the closures, adding that they believed Burberry would continue to fall behind stronger peers in the sector during an expected “post-Summer bounce” in spending into early 2021.
Burberry shares were down 2% at 1,881.5p in early trading.