Shares in Burberry (BRBY.L) jump 3.1 percent, helped by a target price hike by Barclays Capital to 600 pence as the broker initiates coverage of the luxury goods group with an "equal weight" stance.
The broker says it is positive on the outlook for soft luxury names, particularly driven by private consumption growth, strength in emerging markets and stock market performance.
It also initiates coverage on French luxury goods company LVMH (LVMH.PA), with a "overweight" recommendation and a 85 euro price target, describing the firm as its top pick among soft luxury names. The stock is up 1.8 percent.
"We do believe that certain trends that have emerged such as a higher focus on 'value for money' are likely to persist for some time. This trend plays to the strengths of both the companies that we discuss here," BarCap analysts write in a note to clients.
The broker also sees potential for further top line growth for Burberry in the medium term from expansion and improved productivity.
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