Where might the Burberry share price go in the next 12 months? Here’s what the experts say

2024’s been a rough year for the Burberry (LSE:BRBY) share price. Shareholders have witnessed one of London’s oldest fashion groups collapse by almost 50% since the start of the year. And while the shares have started to rebound over the last month, they’re still over 70% lower than mid-2023 levels.

Since the start of October, Burberry shares have climbed a respectable 10% as new leadership begins to repair the damage of earlier poorly-received creative decisions. While new CEO Joshua Schulman’s only recently moved into the corner office, investors are seemingly pleased with the progress made so far.

The group’s latest fashion show seems to have resonated far better with Burberry fans than previous collections. And that, in turn, is sparking a small but renewed sense of confidence from investors. But how does this all translate into analyst forecasts? Let’s take a look at what the experts are now thinking.

City analysts are still on the fence

While opinions surrounding Burberry have started to improve, it seems no institutional analysts are willing to place their bets just yet. Of the 19 analysts following the business, 15 have placed the stock on Hold, with the remaining four putting the business into the Sell category. And looking at the earnings and revenue predictions it’s not hard to see why.

Sales for its 2025 fiscal year ending in March are expected to slip by an average of 18.8%, with growth still elusive in its 2026 fiscal year as well. That’s obviously frustrating, but it’s not catastrophic. Yet the real concern seems to lie with earnings.

While opinions are mixed, it seems there’s notable concern that Burberry’s bottom line could dip into the red. Lower sales paired with higher capital expenses to right the ship may be quite significant. And even when taking the most optimistic forecast, that still suggests a 64% crash in profits compared to a year ago.

With that in mind, it’s not surprising the Burberry share price forecast for the next 12 months isn’t exactly positive.

Is this a buying opportunity?

In the world of contrarian investing, there’s a famous quote by Baron Rothschild: “Buy when there’s blood in the streets, even if the blood is your own”. It’s a strategy that can be highly lucrative if the underlying business is able to rebound and return to its former glory. And in the case of Burberry, that’s far from impossible.

On a price-to-sales basis, the shares are currently trading at almost 1 on a forward basis. That definitely screams ‘bargain’ if management can restore the group’s profitability and eventually return to growth. However, taking this stance comes with undeniable risk.

Investors seem to be holding Burberry on a very short leash. And the slightest hiccup or speedbump is likely to spark considerable volatility in the share price. Personally, I want to see a bit more progress made in recovery before investing any of my capital.

But it’s definitely a business to watch closely at today’s prices.

This post was originally published on Motley Fool