Burberry Shares Cut to Sell Despite JPMorgan Seeing Stabilising Sector in 2026

Burberry (LON: BRBY) shares came under pressure on Friday, closing around 2.9% lower after JPMorgan downgraded the luxury group to Underweight from Neutral, even as the bank argued that the broader luxury sector should begin to stabilise next year.

JPMorgan lifted its price target on the stock to 950p from 850p but said it sees “downside risk to consensus estimates” for Burberry heading into 2026. This is despite the company recently stating that it sees signs that customers are “returning to the brand they love.”

While JPMorgan expects the luxury industry to return to low-single-digit growth next year, the first sector-wide expansion it has modelled in two years, it believes Burberry remains an outlier as it struggles to rebuild momentum.

In its note, the bank pointed to recent trading trends showing the brand has stabilised but not yet inflected, with the most recent quarter delivering a 2 percent lift in like-for-like retail sales against a steep 20 percent decline a year earlier. 

Despite new leadership and a series of strategic initiatives rolled out over the past 12 months, JPMorgan said Burberry has yet to demonstrate a convincing turnaround.

The analysts also highlighted high-frequency data showing consumer engagement weakening week after week since September, as the company laps tougher comparatives and last year’s discount-driven spike in activity. 

That softness, the firm argued, suggests brand momentum remains inconsistent at a time when investors are looking for clearer evidence of recovery.

The downgrade forms part of JPMorgan’s wider 2026 sector outlook, which anticipates a more supportive backdrop for luxury names overall. 

But for Burberry, the bank warned that the path to sustained improvement appears slower and more uncertain than for peers.