Abstract

This paper aims to give the shareholders reasonable recommendations on buying, holding or selling Burberry’s shares. It takes account of the business strategy, and ratios from financial statements, presented in Part 2 and 3. We consider the competitive forces of Burberry using Porter’s five-force framework. Then, we analyse Burberry’s financial conditions comparing with LVHM and come to the conclusion that although the ROE is declining, Burberry has a better ratio of ROE than most of its competitors. Finally, we forecast the key index in Part 4 and then use different models on valuation of the firm in part 5. A conclusion can be made that Burberry’s share price will increase in the future, thus we recommend that Burberry’s shareholders can hold and buy more stocks to gain the yields from dividend and rise in stock price.

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