(CercleFinance.com) – Liberum retains its ‘hold’ recommendation on Asos stock but lowers its price target to 700p (from 900p) to reflect estimate cuts.
Asos has just published, recalls the analyst, a press release indicating that after good growth in June and July, sales in August were below expectations.
‘ As a result, sales growth is expected to be lower than previously forecast at around 2% at constant currency and adjusted PBT will be at the low end of the company’s forecast range of between £20m and £60m. sterling (compared to a range of £110-140m forecast at the start of FY22). ‘
The analyst points out that given the current valuation, the group could be the subject of offers. ‘ The current valuation, at 0.2 times forward revenue, is optically low, but the risk of a further decline in earnings and a possible change in strategy under the leadership of a new CEO and a new president remains. ‘
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