Broker snap: Nomura lifts target for Burberry as results beat forecasts

21st May 2013 10:13

Brand elevation has continued at Burberry, according to Nomura which has upped its target price for the luxury stock after its full-year results came in above forecasts.The company reported earnings per share of 70p (+14%) in the year to March 31st with a product mix, inventory management, foreign exchange and modest price increases leading to better-than-expected margins."In our view, as space growth slows in the year ahead and stores mature, this should provide ongoing support to further gains in the Retail/Wholesale margin," Nomura said.The broker said that product strategies at Burberry are continuing to help elevate the brand, while sales in China are strong. Meanwhile, the integration of the new Beauty division is going well and a new distribution centre in France and SAP implementation is "indicative of the pace of executive", analysts said.Nomura has lifted its target price for the stock from 1,350p to 1,440p and kept its 'neutral' rating."With a strong performance in FY13, we see FY14 as an opportunity to leverage fragrance marketing and grow the category. We are becoming confident in the evolving Japan transition, given proven execution in China in the past three years."The shares were up 1.64% at 1,487p by 10:37.BC