Burberry’s woes showed little signs of easing as concerns mounted over its status as a luxury brand.
Analysts at Jefferies said the company’s commercial direction remains unclear just days after it unveiled its latest collection at London Fashion Week.
The broker added that Burberry received mixed reviews as its shift towards ‘accessible fashion’ lacked a ‘wow factor’.
It is the latest blow for the firm, which is already under huge pressure after it replaced its chief executive over the summer and was booted out of the FTSE 100.
Trading is unlikely to get easier, according to Jefferies, due to a slowdown in China, reduced travel spending and continued uncertainty in the US.
Out of fashion: Burberry received mixed reviews as its shift towards ‘accessible fashion’ lacked a ‘wow factor’
As a result, the broker downgraded Burberry from ‘hold’ to ‘underperform’ and slashed the target price by 310p. Shares sank 3.5 per cent, or 22p, to 604.4p, taking losses for the year to almost 60 per cent.
London’s main markets gave up yesterday’s gains as the FTSE 100 fell 1.2 per cent, or 98.73 points, to 8229.99 and the FTSE 250 lost 1.6 per cent, or 330.87 points, to 20831.84.
Private equity firm Bridgepoint was among the top fallers after an investor sold nearly 15m shares at a discount. Shares in the group, which has owned Burger King in the UK since 2017, slumped 11.4 per cent, or 43.6p, to 339.6p.
Close Brothers also came under pressure after analysts at RBC said the merchant bank’s share price is likely to ‘drift sideways’ until there is clarity on historic motor finance claims.
The company has set aside costs to cover potential payouts as the City watchdog is expected to provide an update on the industry-wide review in May next year. As a result, RBC cut its target price on the stock from 620p to 540p. Shares tumbled 13.5 per cent, or 67p, to 431p.
Card Factory headed in the other direction following a broker upgrade. Analysts at UBS said the cards and gifts retailer offers low growth but resilient cash generation and potential for significant shareholder returns.
The Swiss-based bank raised its rating to ‘buy’ from ‘neutral’ and increased the target price from 116p to 180p.
Shares, which have risen almost 30 per cent this year, added 6 per cent, or 8p, to 141p. Rival Moonpig’s strong growth and potential cash returns led UBS to initiate its coverage with a ‘buy’ rating and target price of 350p.
Shares edged up 0.5 per cent, or 1p, to 206p, taking gains for the year to more than 30 per cent.
Extraction fan maker Volution soared after it announced the largest deal in its history.
The group is to buy the Australasian ventilation specialist Fantech for £144m. Shares surged 9.8p, to 54p, to 608p.
S4 Capital rebounded in early trading yesterday, a day after the digital advertising agency warned that lower spending from tech clients would hit revenues. But they ended the day down.
Shares, which sank 5.9 per cent on Thursday, lost another 0.4 per cent, or 0.18p, to 42.16p by the time trading closed.
DIY INVESTING PLATFORMS
AJ Bell
AJ Bell
Easy investing and ready-made portfolios
Hargreaves Lansdown
Hargreaves Lansdown
Free fund dealing and investment ideas
interactive investor
interactive investor
Flat-fee investing from £4.99 per month
Saxo
Saxo
Get £200 back in trading fees
Trading 212
Trading 212
Free dealing and no account fee
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
Compare the best investing account for you
