Burberry Share Price Outlook Ahead of Trading Update

Burberry share price has been in a freefall for the past few weeks ahead of its trading update for the first half of the fiscal year 2023. The BRBY stock price has crashed by more than 5% in the past week and nearly 20% in the past three months. Its price has also dipped by 2% in the year to date but is up by 22.56% in the past year. The company’s shares were down by 1% at 2011p at press time.

2023 Performance

Burberry Group Plc is a leading British luxury fashion house that operates as a holding company, that designs, manufactures, and distributes its apparel and accessories under the Burberry brand. The company is listed on the London Stock Exchange and is a component of the FTSE 100 index. Burberry’s main rivals include LVMH, Prada, and Gucci, among others.

Burberry share price has been treading waters since May despite publishing stronger-than-expected fourth-quarter sales. Since then, the company’s total market cap has slipped to £7.69 billion. The British company reported a 16% jump in the group’s store sales for the fourth quarter, buoyed by a rebound in China. China, Burberry’s biggest market, recorded a 13% increase in its sales in the three months to April 1.

Despite the better-than-expected sales data, the company’s shares plunged after the Americas remained in a weak spot, with a 7% decline in quarterly sales. Europe performed strongly, with sales up by 27% in the fourth quarter. Burberry maintained its 2024 guidance, stating that it was mindful of macroeconomic and geopolitical concerns.

Burberry Group Plc is expected to publish its trading update for the first half of the fiscal year later this week on Friday. The company’s performance is thought to be affected by increasing foreign exchange headwinds against the backdrop of the appreciation of the pound.

Burberry Share Price Outlook

The daily chart shows that the Burberry share price has been on a bearish trajectory for the past few weeks, hovering around its lowest level since December 2022. Along the way, it has formed a descending channel shown in yellow. The stock remains below the 25-day and 50-day exponential moving averages, with its RSI in the oversold region at 28.

Therefore, the Burberry share price is likely to pull back further in the ensuing trading sessions. A move below the important level of 2000p will have sellers targeting the next support at 1974p. However, a flip above the support level at 2120p might push the price higher to the 50-day EMA at 2240p.

BRBY Price Chart

Leave a Reply

Your email address will not be published.