STOCKS NEWS EUROPE-Burberry up; HSBC upgrade helps

Shares in Burberry (BRBY.L) rise 2 percent after HSBC upgrades the luxury retailer to "overweight" from "neutral", saying the firm has a compelling growth story in the luxury goods space.

The broker also increases its earnings per share estimates for Burberry by 15 percent for FY2010 and 20 percent for FY2011 following impressive top line growth and renegotiation of the Japanese licence agreement. HSBC also hikes the share's target price to 725 pence from 525 pence.

"The real interest in Burberry is its expected superior top line growth. While space expansion has no reason to slow significantly in the next 2-3 years, product diversification looks like an easy win and its unique British heritage positioning could help," analysts at HSBC write in a note.

Burberry could also benefit from M&A prospects and its currency position which is positive or neutral unlike its European peers, the broker says.

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