Burberry Group PLC (LON:BRBY) got its price target slashed to 912p from 1,415p by UBS, as analysts see it as one of the most likely to be hit by the coronavirus crisis.
Retaining the ‘sell’ recommendation, the investment bank cut earnings per share estimates by 14%, 51% and 29% over the next three financial years.
READ: Burberry weak as sales collapse as coronavirus lock downs hit Europe and the US
Sales this year are expected to come in at £2.6bn, down 3% from estimates, while next year they are forecast to be £2.4bn. In 2022 they are expected to come back to £2.6bn.
Analysts do not expect the FTSE 100-listed fashion powerhouse to benefit from “pent-up demand” once the pandemic is over, due to its ‘evergreen’ products which make 20% of the offering.
The remainder 80% is made of seasonal items, which the trench coat designer will have to sell through “heavy promotional activity”, UBS said, causing gross margins to plunge further.
Analysts added that Burberry can rely on a “sound” financial position, having ended 2019 with £840mln in cash.
Shares were trading 3% lower at 1,319p on Thursday morning.