Burberry Group PLC (LON:BRBY) was upgraded to ‘sector perform’ from ‘underperform’ by RBC Capital Markets due to limited downside risk.
Analysts believe the FTSE 100 fashion powerhouse will beat its second-quarter retail like-for-like estimated fall of 15-20%, reflecting revenue recovery profile similar to peers with healthy trends in Mainland China and improving North America despite a soft European market.
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The Canadian bank noted that Burberry search queries appear to have taken a bigger hit than Louis Vuitton, Bottega Veneta and Gucci through COVID-19, and are almost recovered to prior year levels.
“We believe Burberry's established presence in digital coupled with strategic improvements to product and merchandising should support further improvements in brand heat and revenue recovery in the coming quarters,” analysts said.
“We estimate Burberry can deliver mid-single digit revenue growth and 17.3% underlying margins by financial year 2025.”
Shares slid 5% to 1,496.5p on Monday morning, 31% lower than a year ago.