April 3, 2017 / 10:02 AM / 8 months ago

BUZZ-Burberry: Coty licensing agreement on beauty biz lifts shares

** Burberry shares up more than 1.6 pct after company signs beauty biz licensing agreement with Coty

** The partnership is likely to cut fixed costs and net working capital requirements at Burberry and up royalty payments, all leading to a boost in ROIC, according to Exane BNP Paribas, which sees the deal as a “strong positive” for Burberry

** “Burberry was a dwarf in the land of giants in this industry, and never had sufficient scale to run this business effectively and efficiently,” Luca Solca at Exane BNP Paribas, writes in note to clients

** A strong H2 2016 rally across the luxury sector has seen Burberry shares rise more than 69 pct from last June’s lows

** Earlier this morning, UBS upped its target price on Burberry by more than 9 pct and called the stock its preferred turnaround pick in the luxury sector

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