Burberry was given another lift a day after the luxury clothing label's encouraging results as analysts at Credit Suisse, UBS and others lifted their targets for the shares.
UBS said it saw "a long-term opportunity", with costs and cash flow appearing well under control to drive a current-year EPS upgrade of 10% and ensuing hike of the target price to 1,900p from 1,790p.
With LFL sales remaining subdued "a product refresh remains the necessary next step, but this awaits the new creative director's first show in September that will be delivered in store May/June 2019".
Although the first Tisci collection is not until the Spring/Summer/Autumn show, Credit Suisse said the "additional colour" given on the timeline of product launches suggested "a few capsules" available straight after the runaway but the bulk of the collections will hit the stores in February for Spring/Summer. "New models in handbags, which accounts for circa 20% of group sales, should be visible sooner. Management aims to create an architecture of handbags, including new lines like the Belt Bag launched in February as well as a refresh of existing products. Similar to the Belt Bag, price points are likely to be higher than currently reflecting a quality upgrade."
For now, the Swiss bank believe consensus reflects a low- single digit LFL in FY19 and FY20, "therefore leaving some upside to forecasts should the new collections, in both apparel and handbags, be well received over the next 18 months."
Keeping its 'outperform' rating, CS analysts said the results eradicated some doubts and lifted its target price to 1,950p from 1,850p after shifting earnings per share forecasts up 4% on average for the current year out to 2021. "The stock does not look expensive for a possible turnaround," they added, with Burberry trading at 23 times historic earnings against 24 for the luxury sector.
Berenberg said the results "reassured the market about every single aspect of its equity story": better-than-expected wholesale outlook, cost savings ahead of plan and a £150m buyback programme.
"Although investors may have to wait a little longer for faster like-for-like momentum we enter FY19 with confidence in the next stage of Burberry's turnaround story, ahead of Riccardo Tisci's first collection in September this year."
Berenberg increased its price target to 2,100p from 1,865p and retain its 'buy'rating: "In our view, Burberry remains one of the sector's most exciting turnaround stories."
Deutsche Bank upped its target by £1 to 1,725p for a group it sees as remaining in transition, with current-year guidance implying a year of declining profits despite currency headwinds abating recently.