Asos: shares rebound thanks to broker upgrade
(CercleFinance.com) - Shares in British online fashion retailer Asos are currently up 3% at 2,691 pence, rebounding after a sharp sell-off on Monday, with UBS upgrading the stock to "outperform" for the first time ever.
"Following yesterday's profit warning the shares have now fallen 66% from the year's high," UBS says in a research note.
While Asos' near-term sales and margins are unpredictable, the key considerations are whether it has a business model with potential to grow and generate cash, the broker asks in the note.
"We believe this is the case," it says.
While acknowledging the risk of "catching a falling knife," UBS cites a "long-term winner" on the European apparel market. It has cut its target price from 6,000 pence to 3,500 pence, however.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
"Following yesterday's profit warning the shares have now fallen 66% from the year's high," UBS says in a research note.
While Asos' near-term sales and margins are unpredictable, the key considerations are whether it has a business model with potential to grow and generate cash, the broker asks in the note.
"We believe this is the case," it says.
While acknowledging the risk of "catching a falling knife," UBS cites a "long-term winner" on the European apparel market. It has cut its target price from 6,000 pence to 3,500 pence, however.
Copyright (c) 2018 CercleFinance.com. All rights reserved.