June 7, 2012 / 8:32 AM / 7 years ago

STOCKS NEWS EUROPE-Burberry rises as CS ups to "outperform"

Shares in Burberry rise 2.6 percent, second-top riser on the FTSE 100, as Credit Suisse upgrades its rating on the luxury goods firm to “outperform” from “neutral” and raises its target price to 1,650 from 1,420 pence.

“Our most recent proprietary survey with buyers and merchandise planners from 20 high-end department stores around the world suggest sustained top line outperformance for Burberry,” Credit Suisse said in a note.

“While cognizant of potential macro risks for luxury stocks, our call today is about highlighting Burberry as a relative sector outperformer, with its premium price-to-equity (PE) valuation to peers well supported by superior cash-flow-return-on-investment and perceived long-term corporate activity optionality,” the broker said.

Burberry trades on a forward 12-month Smartestimate PE of 17.6 times, compared with LVMH and Hugo Boss on 15.3 and 14.9 times, respectively, according to Thomson Reuters Starmine data.

Reuters messaging rm://david.brett.thomsonreuters.com@reuters.net

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