Bernstein: ME, EMEIA Region Down 1%; Americas Up 12% (vs. 10.6%), Greater China
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Key Views
Product momentum improved, with outerwear delivering double-digit growth and handbags returning to growth. The company raised its H1 FY2027 wholesale revenue guidance from mid-single-digit to high-single-digit growth, reflecting positive wholesale partner feedback. Currency movements are now expected to benefit FY2027 revenue by approximately £20 million with a roughly neutral impact on adjusted EBIT, reversing prior expectations of around £10 million headwinds to both metrics. Bernstein's EPS forecasts stand at £0.24 for FY2026, rising to £0.39 in FY2027 and £0.55 in FY2028, with revenue projections of £2.42 billion, £2.563 billion, and £2.724 billion respectively.
Outlook
Bernstein believes Burberry has completed the first phase of its brand revitalization. However, sustained recovery depends on management execution. The valuation applies a 1.7x target P/E relative to MSCI Europe on a blended NTM+1 forward EPS basis. Key downside risks include Daniel Lee's new collections underperforming, execution missteps in brand transformation, and higher-than-expected revitalization costs.
Recommended Securities
- Burberry Group PLC (BRBY.LN): Outperform; target price 1,300 pence. Closing price on July 16, 2026 was 1,120.50 pence, implying 16% upside.
Key exhibits
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