Burberry Group PLC (LSE:BRBY)’s stock is expected to appreciate over the medium term despite the impact of reduced sales in China.
Analysts at investment bank UBS predict that the British design house’s stock will lift by about 12% over the next year, giving it a target price of 1,848p with a ‘neutral’ rating.
In the near term, UBS expects Burberry’s stock could be driven lower by currency depreciation, despite an expected boost to its top-line revenue figures from currency effects.
Burberry said in a trading update today that it anticipates a £90mln tailwind to its underlying earnings for the full year.
The retailer guided for currency effects after posting modest global sales growth despite a 35% drop in turnover in mainland China.
It is forecasting an uplift of £190mln to its revenue for the year, from previous projections of £159mln.
Burberry's share price fell 4.6% after the quarterly update.