Investing.com -- Wall Street analysts are divided on the outlook for  Burberry  (LON:BRBY) following its latest quarterly results and strategy update.

UBS upgraded the stock to Buy from Neutral, raising its price target to 1,400p from 918p. The bank cited a more focused strategy aligned with Burberry’s heritage as a key reason for turning positive.

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UBS analysts said the renewed emphasis on outerwear, heritage styles, and more accessible price points comes at a time when luxury consumers are showing signs of fatigue.

“The weakness in the luxury sector due to limited newness and stretched price points, will enable market share gains at lower incremental cost,” analysts led by Zuzanna Pusz, wrote, adding that this shift underpins a projected earnings per share (EPS) compound annual growth rate (CAGR) of 85% through fiscal 2028 (FY28).

UBS now sees EBIT margins climbing back to ~16% by FY30, supported by stronger sales forecasts, incremental cost-cutting, and the reduction of outlet exposure.

The bank values the stock using a mix of discounted cash flow (DCF) and relative enterprise value (EV)/sales metrics, arguing the turnaround trajectory is underappreciated by the market.

“In our view, should the positive EPS momentum continue BRBY shares appear relatively cheap, with 2026 PEG ratio of <1x, far below luxury and sportswear sectors as well as premium apparel peers,” the analysts said.

In contrast, Deutsche Bank downgraded Burberry to Hold from Buy, despite acknowledging early signs of brand recovery.

The bank raised its target to 1,000p from 900p, but warned that the recovery story has already been largely priced in after a stronger-than-expected FY25 and upbeat management commentary.

Analyst Adam Cochrane noted that further upside would require either cFX sales growth in the double digits or EBIT margins to exceed mid-teens guidance by 2028.

“This may be feasible but more evidence that the success in the heritage ranges can be carried across the remainder of the range is required, in our view,” he wrote.

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