Asos share price: Analysts say group’s target demographic worried about Brexit
Hargreaves Lansdown says Asos (LON:ASC) has reported ‘significant deterioration’ in trading as its target demographic worries about Brexit, Citywire reports. The comments came after the retailer updated investors on its performance yesterday, trimming its sales growth and EBIT margin guidance for the financial year ending August 2019.
Asos’ share price tumbled in the previous session following the results, ending trading 37.55 percent lower at 2,614.00p, and taking its one-year decline to 57.84 percent. The shares have climbed higher in early morning trade this Tuesday, having gained 3.52 percent to 2,706.00p as of 08:10 GMT.
HL weighs in on Asos
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Citywire quoted Hargreaves Lansdown analyst George Salmon as commenting yesterday that despite its ‘impressive strides’, Asos had been ‘tripped up’ by the challenging consumer backdrop which has seen a drop in retail footfall. The analyst, however, reckons that these results show that this is not due to online players taking a bigger share but that it was “more complicated, and more worrying, than that”.
“It looks like consumer confidence has been knocked to the extent that people aren’t spending much anywhere,” Salmon explained, adding that the uncertainty around Brexit would ‘be playing a major role,’ and it probably was no coincidence that the online retailer’s “key demographic of twenty-somethings generally harbour more concerns over the future of the economy post-Brexit than their parents”.
Other analysts on group
Liberum Capital reaffirmed Asos as a ‘buy’ yesterday, without specifying a price target on the shares, while Numis Securities, which also rates the online retailer as a ‘buy,’ slashed its valuation on the stock from 7,000p to 5,000p. According to MarketBeat, the company currently has a consensus ‘buy’ rating and an average price target of 6,906p.