Hedge fund manager David Neuhauser said shares in luxury retailer Burberry offer an attractive investment opportunity after the company unveiled a new turnaround strategy. The London-listed fashion house told investors earlier this month that it would refocus on traditional designs and statement pieces as part of an overhaul to revive its struggling business. After the news was announced, the stock price rose more than 22%, setting the largest intraday rise in history, and closed up 18.7% that day. However, the stock, which is also listed in the U.S. and Germany, is still down about 40% year to date. BRBY-GB 1Y mountain Neuhauser, managing director and founder of Livermore Partners, believes the British brand’s lackluster stock performance this year, partly due to sluggish demand in the global luxury market, creates a compelling entry point for investors. “I think in the short term you’ll see luxury goods fall into the value bucket,” Neuhauser told CNBC European Street Signs on Tuesday. “With the share price down so much, it creates a very good opportunity.” Neuhauser said Livermore holds a “pretty nominal” position in Burberry after Burberry’s profits rose 40% in 2016 after years of gains. %-50%. Challenging times have presented themselves, particularly in Asia, where consumer spending has declined. Burberry has been grappling with reduced tourist spending in China and wider economic uncertainty affecting its key markets, but they are not the only factors weighing on its shares. “We believe that the huge sales pressure from Chinese consumers (about 30% of sales on average) since 2023 (Q4), as well as companies’ varying degrees of sales exposure to the cluster, have made the industry The underlying picture cast a shadow. Burberry was the only luxury retailer not to report “weak organic sales growth” in the latest quarter, UBS said. The company’s year-over-year sales beat expectations while other companies failed. The Swiss investment bank raised its price target for Burberry and now expects the stock to rise 14% over the next 12 months. “Burberry Forward” The brand’s new strategy “Burberry Forward” was announced last week by new CEO Joshua Schulman together with the interim results. Stifel analyst Rogerio Fujimori said in a note to clients: “Burberry faces many challenges, but it is taking smart actions to stabilize the business, including new cost-saving programs and addressing excess inventory issues. However, Deutsche Bank Analyst Adam Cochrane noted, “The stock price reaction reflects the sequential improvement (in second-quarter constant currency sales), some relief from the liquidity requirements for the turnaround, appreciation for the new strategy and a degree of combination.” Neuhau “I think Burberry has achieved a good turnaround under the new CEO,” Se added, while warning that the recovery could take longer than expected. “I think over time Burberry, with a good turnaround under strong leadership, could really see the share price rise. He also raised the possibility of M&A activity, although that would be a longer-term consideration.” Adding: “In the short term, the stock represents good value.” The median price target among all stock analysts surveyed by FactSet suggests 5% downside risk to the stock. target price.
Burberry stock (BRBY) ‘good value for money’, says hedge fund manager | Real Time Headlines
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