Newspaper article The Evening Standard (London, England)

Merrill Suited by the Look of Burberry; MARKET ROUND-UP

Newspaper article The Evening Standard (London, England)

Merrill Suited by the Look of Burberry; MARKET ROUND-UP

Article excerpt

ESSEX girls, football hooligans and others with a fetish for check clothing aren't the only ones who like Burberry.

Merrill Lynch today upped its rating on the luxurygoods maker to buy from neutral, predicting that sales of its handbags will continue to increase.

The company, which says it has longsince shaken off its "chav" image, has seen its shares plunge more than 8% since its year-end results last month.

Merrill said: "At the time, the company came at the low end of consensus but this was due to one-off costs related to the closure of the Treorchy facility in Wales and the difficulty to meet demand, particularly on the latest luxury hand


The broker says the stock now has "about 17% upside potential". The shares put on 512p to 641p on the news.

Overall, however, it was looking like another down day for the FTSE, though it did manage to edge up two points to 6522.4 in nervy early trading.

Even an upgrade from Goldman Sachs for Footsie powerhouse Vodafone failed to spark anything close to optimism. Voda put on a mere 0.4p to 157.4p.

Bear Stearns also did its best for the cause, upping BT to outperform with a price target of 404p.

"We believe further upsideexists, namely in broadband, cost-cutting proceeds, lower pension contributions and ultimately further shareholder returns," said a note from the broker. BT shares added 114p to 32314p.

There was also a pat on the back for pubs group Mitchells & Butlers, the company behind the All Bar One chain and Bass bitter. JPMorgan raised its price target to 850p, based on the increase in the value of the company's property portfolio. The bank couldn't resist pointing out that it still prefers JD Wetherspoon and Punch Taverns as investment opportunities. M&B shares edged up 612p to 84812p.

Wall Street remains in the mire, as investors increasingly feel that rising bond yields make equities look like a far from attractive place for their money. …

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