We no longer find Burberry''s valuation attractive relative to our Outperform stocks When we upgraded Burberry in June 2021 we suggested it was a ''Division 2'' player (an average business) priced as a ''Division 3'' player (structurally impaired). In calendar 2H21, our call did not work as (i) the company announced the departure of CEO Gobbetti, leading to concerns Creative Director Tisci might leave, and (ii) top line underperformed ''Division 1'' players more markedly. However, in calendar 1H22, Burberry''s share price performed second best in our 16 stock luxury universe, down only 10% (after Hugo Boss -6%) vs a c30% median. We attribute this mostly to: (i) value stocks'' lower vulnerability to rising interest rates; (ii) Burberry consistently raising earnings guidance in spite of disappointing organic top line thanks to higher gross margin, better cost control and favourable FX; (iii) new CEO Akeroyd endorsing existing medium-term financial targets. Burberry now trades on c16x cal PE 2023 on our estimates which are c9% below consensus, no longer an attractive risk/reward, in our view, versus our Outperform rated stocks. We expect flat Retail LFL in 1Q (due on 15 July) On 15 July, we expect Burberry to report flat Retail LFL in 1Q ending June 22, with roughly one-third of the business (China) down c40% and two-thirds (ROW) up c20%. We note, however, that US could show a moderation in growth due to Burberry''s exposure to entry-level products such as part of its shoe business, whilst other luxury companies do not seem to have seen any slowdown yet. FY Mar 24 EPS estimates cut by 11%, downgrading to Neutral (TP 1,900p from 2,500p) We leave our FY Mar 23 EBIT estimate unchanged in spite of lower organic sales growth forecasts (1.8% vs 7.8% previously) as FX is a c18% EBIT tailwind. We cut our FY Mar 24 EPS estimates by 11% and introduce Mar 25 estimates that are lower than those we used in our DCF for that year. On top of the worsening macro...