Asos share price rallies as Peel Hunt says ‘buy’
Shares in Asos (LON:ASC) have jumped in today’s session as Peel Hunt reinstated its ‘buy’ rating on the London-listed retailer. Proactive Investors quoted the analysts as arguing that the online fashion retailer’s plunge last month was a ‘rare buying opportunity’.
As of 13:50 GMT, Asos’ share price had added 6.20 percent to 2,517.00p. The online retailer’s shares have lost more than 63 percent of their value last year.
Peel Hunt sees Asos as ‘buy’
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Peel Hunt reinstated their ‘buy’ recommendation on Asos today, with a price target of 4,000p on the shares, in the wake of the group’s profit warning last month. Proactive Investors quoted the analysts as saying that they believed that the retailer’s management had misjudged the importance of Black Friday and had “failed to create a compelling enough campaign for customers, who were shopping at 50-70-percent discounts elsewhere”.
The broker, however, reckons that trading picked up again in the build-up to Christmas and New Year which should see it reverse last month’s guidance cut in its upcoming trading update.
“Trading misstep aside, ASOS remains the go-to platform for young fashion, offering significant medium-term growth prospects across the US, Europe, UK and wider global markets,” Peel Hunt pointed out, adding that it looked for “February’s trading update confirm that sales performance is above revised full-year guidance of 15 percent group revenue growth”.
Other analysts on retailer
The 21 analysts offering 12-month price targets for Asos for the Financial Times have a median target of 3,900.00p on the shares, with a high estimate of 7,900.00p and a low estimate of 2,000.00p. As of December 29, the consensus forecast amongst 28 polled investment analysts covering the London-listed retailer has it that the company will outperform the market.