Broker snap: Seymour Pierce expects a strong half from Burberry

6th Oct 2011 10:06

Seymour Pierce has kept its buy rating and 1,650p target price for British luxury brand Burberry, saying that the premium valuation to its peer group is justified."Despite the recent sell off in Burberry shares and the sector generally driven by macro concerns over a potential global slowdown and a hard China landing, we expect Burberry to report strong Q2 trading after a faultless Q1 performance. Focus will be on China's performance and for any evidence that US department stores will cut back wholesale orders for spring/summer 2012," said analyst Kate Calvert.The broker is expecting first half sales total £828m, 29% higher than last year, with retail sales up 44%.The shares are trading on 16.7 times forwards earnings, and while this is above the peer group's (excluding Hermes) average multiple of 15, Seymour Pierce believes that this still "undervalues its long term growth potential."Shares were up 1.43% at 1,204p by 10:06.BC