Broker snap: Nomura neutral on Burberry

18th Nov 2009 12:44

Burberry is going out of fashion at Nomura Securities, which has downgraded the stock to 'neutral' following the luxury fashion group's results earlier this week. Although impressed with Burberry's strong interim results and the group's long term growth prospects, the broker thinks the shares are now fairly valued.'In our view Burberry deserves to trade on a premium to the sector and its own historical valuation of 15x [15 times annual earnings per share] for its strong ongoing momentum and significant upside potential to medium term margins,' Nomura analyst Allegra Perry opines. 'In order to see a further re-rating we believe the stock now needs a significant upgrade to estimates, which we view as unlikely in the near term,' Perry adds.Nomura has a price target for Burberry of 623p.