Fri Sep 20 07:32:23 UTC 2024: ## Burberry Downgraded to Underperform Amidst Management Changes and Uncertain Future
**London, UK -** Jefferies has downgraded its rating for Burberry Group PLC (BRBY:LN) to Underperform, citing concerns over the company’s uncertain future and recent performance. This move comes alongside a significant price target reduction from GBP 8.00 to GBP 4.90.
The downgrade stems from anticipated management changes and a challenging demand environment. Analysts anticipate a shift in Burberry’s strategic direction under new leadership, adding to the uncertainty surrounding the brand’s future.
Jefferies predicts a decline in quarterly retail comparable growth by 20% and 10.9% in the next two quarters of the fiscal year 2024/2025, followed by a modest increase of 3.6%. For the fiscal year 2025/2026, a 2.3% growth is anticipated.
The report highlights concerns over Burberry’s market share losses and the lack of clarity regarding its commercial trajectory. The company’s recent attempt to balance its luxury heritage with more accessible offerings has not been met with widespread approval. The Spring/Summer 2025 collection, in particular, drew mixed reviews, with some critics suggesting it lacked the expected wow-factor for a luxury label.
Jefferies concludes that even if Burberry successfully navigates current gross margin pressures, its valuation remains less compelling compared to its peers. This indicates that the stock may continue to be affected by the uncertainty surrounding the company’s direction and performance.
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