Burberry "Q1 Preview: Testing Earnings Upgrade Visibility as Shares Lag" (Buy)

Research evidence excerpt

Burberry "Q1 Preview: Testing Earnings Upgrade Visibility as Shares Lag" (Buy)

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Burberry Equities

United KingdomQ1 Preview: Testing Earnings Upgrade Visibility

as Shares Lag Clothing & Fabrics

12-month rating Buy

12m price target 1,425pShares Lag as Concerns Over Earnings Upgrade Visibility Build

Prior : 1,420p

Over the past month, Burberry shares have underperformed the sector (-6% vs. +6%),

reflecting investor concerns around the sustainability of top-line growth and limited Price (30 Jun 2026) 1,062p

visibility on earnings upgrades. This follows a stronger-than-expected gross margin at RIC: BRBY.L BBG: BRBY LN

FY26 results (67.9% vs. consensus 65.2%), delivered earlier than anticipated, which has

led investors to question to what extent future EPS upgrades will need to be driven Trading data and key metrics

primarily by opex discipline rather than further margin upside. Against a backdrop of 52-wk range 1,372p-1,005

accelerating momentum across peers, investor attention has increasingly shifted Market cap. £3.81b/US$5.04b

elsewhere. While we do not expect the upcoming Q1 FY27 results to fully alleviate these Shares o/s 358m (ORD)

concerns, given still favourable comparables, we believe that consistent quarterly Free float 100%

delivery should, over time, rebuild confidence in the durability of Burberry’s turnaround Avg. daily volume ('000) 1,928

story. At the same time, the stock now trades at a significantly lower valuation (~17x Avg. daily value (m) £21.8

CY27 P/E), which we view as attractive. Buy. Common s/h equity (03/27E) £1.10b

P/BV (03/27E) 3.4x

Q1 preview: Continuation of the healthy momentum Net debt to EBITDA (03/27E) 1.1x

BRBY is set to report Q1 FY27 sales on 17 July at 7am UKT.