A Burberry Group Plc analyst whoâs had a neutral rating on the struggling luxury-goods stock since the Global Financial Crisis has turned positive for the first time since 2008.
Citigroup Inc.âs Thomas Chauvet upgraded his recommendation to buy on Thursday, saying that âpotential rewards now outweigh the risks.â Burberry shares rose as much as 4 percent.
The stock has been in the doldrums since hitting a record high two years ago, sliding about 70 percent in that time as the brand struggled to push more upmarket. A broader drop in demand for pricey items also weighed, and Burberry lost its place in the UKâs FTSE 100 Index last year.
âWhilst patience is needed, potential rewards now outweigh the risks, considering the companyâs significant transformation potential over the next three years,â Chauvet wrote in a note. He expects the âBurberry Forwardâ strategy implemented by new chief executive officer Joshua Schulman to bolster brand visibility and desirability.
After an encouraging update in January, analysts will be seeking more proof of revival when the company next reports on May 14.
By Kit Rees
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