Last checked at 
(Sharecast News) - HSBC downgraded Burberry to 'hold' from 'buy' on Wednesday and cut the target price to 2,350p from 2,400p, saying it's time to take a breather after a solid run.
The bank argued that the upcoming growth pickup and margin improvement beyond 2022 is well reflected after the recent re-rating.
"We believe Burberry is now well positioned to deliver on its mid-term plan of sales up by high single digits, implying an outperformance versus the luxury industry," HSBC said. However, it pointed out the shares have risen 12% since the release of full-year earnings on 13 May and 24% year-to-date.
The stock is now just 3% below its pre Covid-19 peak of 2,329p reached on 17 January 2020.
"We believe the stock price already factors some upcoming positive catalysts such as the expected release of strong retail like-for-like in Q1 due on 16 July, which we forecast up 74% y-o-y or down 4% on a two-year stack, or broadly flat on a two-year stack excluding the high single-digit negative impact from the ongoing cut in mark-downs," HSBC said.
In the same note, HSBC downgraded Kering and Richemont to 'hold' from 'buy', while Hermes was cut to 'reduce' from 'hold'.
12 Jan 2024 08:16
Burberry shares hit lowest since 2020, luxury stocks sag
LONDON, Jan 12 (Reuters) - Shares in British luxury group Burberry fell as much as 14% in early trade on Friday after the company downgraded its guidance, citing a slowdown in luxury demand.
Read more