The Burberry share price popped on Wednesday after the firm published strong guidance. The BRBY stock jumped by over 6%, becoming the second-best performing company in the FTSE 100 after Polymetal. It has jumped by over 8% from its lowest level this year.
Burberry is a British luxury goods company that makes most of its sales internationally. Its business has done relatively well recently as the world’s wealth has exploded. However, the firm still lags other European luxury stocks like Louis Vuitton, Richemont, and Hermes,
In a statement, the firm said that its sales jumped by 26% in the fourth quarter. That was more than double the growth rate that the firm reported in the third quarter. It expects that its full-year profits will be between 500 million and 515 million pounds. The median estimate by City analysts was at 470 million pounds.
Analysts believe that the Burberry share price will keep rising in the near term. For example, those at Barclays see the shares rising to about 2,000p while those at Royal Bank of Canada see it rising to 1,980. The most optimistic analysts are from BNP Paribas, who see the shares rising to 2,700p.
The daily chart shows that the BRBY share price jumped sharply on Wednesday after the latest earnings. The stock rose to over 1,86p, which is substantially higher than the key support level at 1,711p. It has failed to move below this level several times.
Still, a closer look at the chart shows that it has formed a descending triangle pattern. In technical analysis, this pattern is usually a bearish sign.
Therefore, while analysts are bullish on the stock, investors need to be cautious since a bearish breakout cannot be ruled out in the near term.
This post was last modified on Jan 20, 2022, 07:19 GMT 07:19