Highlights

  • Deutsche Bank raises Burberry to 'buy' from 'hold', price target 1,500 GBX.
  • LVMH upgraded to 'buy' from 'hold', price target GBP 635.
  • Bank highlights early signs of China-driven sales recovery and shifting investor sentiment.

Deutsche Bank elevated Burberry (LSE:BRBY) from a 'hold' to a 'buy' rating, increasing the price target to 1,500 GBX from 1,200 GBX. The upgrade follows sequential improvement in constant FX (cFX) sales growth, which exceeded initial expectations. Analysts noted that the execution of the 'Burberry Forward' strategy remains on track, with enhancements in collection appeal, online and offline shopping experience, and product/price alignment.

  • Burberry’s stock has risen approximately 30% year-to-date, and 90% since April lows.
  • FY27–FY28E consensus LFL expectations align with current price performance.
  • Further upside depends on high single-digit to low double-digit cFX sales growth and sustainable EBIT margin recovery.

Deutsche Bank emphasized that early improvements in sales, combined with management confidence and brand heat data, suggest Burberry may replicate success across its broader product range.

LVMH Rating Upgrade

LVMH was upgraded from 'hold' to 'buy', with the price target increased to GBP 635 from GBP 520. Deutsche Bank noted that while LVMH faced challenges in recent years, including price perception impacts and weaker sales across divisions, improving investor sentiment could provide positive momentum.

  • Management and creative team adjustments, along with cost efficiency exercises, are underway.
  • Share buybacks are being considered, supported by the company’s strong balance sheet.
  • Valuation at 22x Cal 26 PE sits below long-term averages, indicating potential upside.

The bank expects LVMH to benefit from easier sales comparatives in 2H25 and 1H26, with EPS trajectory projected to improve. LVMH’s upgrade aligns it with Deutsche Bank’s existing buy-rated luxury names, including Hermes, Pandora, and Zegna.