Burberry Group PLC

Goldman Sachs initiated coverage of 10 European luxury stocks, assigning Buy ratings to just four, as it argued that muted sector growth will not last and that 2027 will mark a turning point after three years of post-COVID normalization. Analysts led by Erwan Rambourg said the slowdown in sales has been driven less by macro headwinds than by aggressive pricing and a slower pace of innovation, both potentially linked to a degree of strategic inertia, noting that traditional luxury brands raised prices by about 60% between mid-2019 and mid-2026. Goldman forecasts organic sales growth for its coverage rising from 6% in 2026, on depressed 2024 and 2025 comparisons, to 7% in 2027, with the sector reverting to mid-single-digit growth, and expects U.S. outperformance to extend into 2027 and beyond, a mechanical rebound in the Middle East and stabilizing sales in China, while Europe stays muted apart from American tourist flows. The four Buy-rated stocks are Richemont, LVMH, Moncler and Prada, with price targets of CHF225, €500, €62 and HK$52 respectively. Goldman initiated Kering, Burberry and Brunello Cucinelli at Neutral and kept Zegna at Neutral, while starting Hermes and Swatch at Sell.