Broker tips: Burberry, Renew Holdings

(Sharecast News) - RBC Capital Markets lifted its price target on Burberry on Tuesday to 1,300p from 1,000p as it upped estimates after the third-quarter trading update. The Canadian bank said Burberry, on which it has an 'outperform' rating, delivered a strong trading statement, with a significant acceleration in revenue growth, and well ahead of expectations.

RBC said stronger-than-expected 3Q25 revenue trends with broad-based acceleration across regions underpinned by scarves and outerwear was the first step in the right direction.

"Chinese cluster momentum cadence may be beneficial for Burberry, and markdown contribution is limited to low single digit percentage in 3Q25," it said. "We believe Burberry is pursuing the right strategy, with important recent key hires (marketing, merchandising), which over time should drive better execution."

RBC upped its revenue estimates by 4% across FY25-27, driven by slightly higher underlying assumptions, positive FX translation impact and slightly higher gross margins. This results in a revised EBIT estimate of £6m versus a previous estimate for a £30m loss.

Analysts at Berenberg lowered their target price on engineering services firm Renew Holdings from 1,350.0p to 1,200.0p on Tuesday following the company's recent trading update.

Berenberg said Renew's "usual meet-and-beat earnings momentum story" gave way to management cautioning that it expected trading for the year to 30 September to be below previous market expectations.

In the context of a 9% adjusted underlying earnings downgrade to its FY25 forecasts, the shares fell by roughly 22% on the day, a move that Berenberg considers to be "overdone", especially when considering that the shares had already drifted approximately 13% since 26 November.

"While short-term headwinds in the rail sector are a frustration, they distract from a provably strong management team and business model - operating margins remain resilient, returns are healthy, and the group's decentralised compounder model has a significant runway to continue, supported by a less-than-0.1x levered balance sheet," said the German bank, which reiterated its 'buy' rating on the stock.

"At just 11.5x FY25 P/E (10.5x FY26), on what we think are now comfortably positioned, if not conservative outer year forecasts, we think this offers an attractive entry point into a quality long-term story."