Burberry earns first buy rating from Citi in 17 years
Citigroup Inc. analyst Thomas Chauvet, who had maintained a neutral stance on the stock since the Global Financial Crisis, upgraded his recommendation to buy on Thursday. Chauvet stated that 'potential rewards now outweigh the risks,' a move that led Burberry shares to rise by as much as 4% in intraday trading.
Burberry's stock has struggled in recent years, falling roughly 70% from its peak two years ago. The decline reflects the brand's difficulty in repositioning itself further upmarket, alongside a broader slowdown in demand for luxury goods. The downturn also led to Burberry losing its position in the UK's FTSE 100 Index in 2023.
'Whilst patience is needed, potential rewards now outweigh the risks, considering the company's significant transformation potential over the next three years,' Chauvet wrote in a note to clients.
He pointed to the 'Burberry Forward' strategy launched by new chief executive officer Joshua Schulman, which aims to elevate the brand's global visibility and desirability. Chauvet suggested this strategic shift could drive a long-term revival.
Following a promising trading update in January, investors and analysts will seek further confirmation of progress when Burberry reports its next results on May 14.
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