On Tuesday, Deutsche Bank adjusted the stock price target for Burberry Group (OTC:BURBY) Plc (BRBY:LN) (OTC: BURBY) to GBP8.00 from the previous GBP10.30, while maintaining a Hold rating on the stock. The revision reflects the bank's assessment of the luxury fashion company's recent strategic decisions and market performance.
The bank's analyst noted that Burberry's decision to appoint a new CEO while keeping Daniel Lee as the creative designer is a prudent move. The early changes in style that Burberry had introduced are being scaled back, and the company is introducing more accessible price points. Burberry is also refocusing on its core products, such as trench coats and scarves, where it has established brand authority.
This shift in strategy comes as a response to growing investor dissatisfaction with Burberry's performance. The analyst anticipates that the changes at Burberry will initially be gradual but will eventually lead to a more significant transformation of the brand's strategic direction.
The stock price target adjustment by Deutsche Bank signals a cautious outlook for Burberry's near-term financial prospects. It also suggests that the bank is closely monitoring the impact of the company's strategic shift on its future performance.
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