Asos: shares higher after Berenberg upgrades to 'buy'
(CercleFinance.com) - Asos shares are up over 2.
5%, pushing them to pole position in London's FTSE AIM UK 50 index on Monday, after Berenberg raised the British online fashion retailer from "hold" to "buy".
The broker - which previously downgraded the stock last July, citing an "annus horribilis" for the company - said Asos now seems to be "out of the woods."
"Performance over peak trading, which demonstrated the resilience of the new logistics infrastructure, together with our extensive conversations with the company, has restored our confidence," Berenberg analysts wrote in their note.
The broker thinks that the main cause of the revenue slowdown in 2019 was operational disruption and believes that at its current valuation the market has overlooked several key drivers of operating leverage.
As a result, Berenberg has raised its target price for the share from 3,000 pence to 4,200 pence.
Asos shares are currently up 2.5% at 3,424 pence. The company's shares have risen 4% so far in 2020.
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