Asos: Liberum upgrades stock
(CercleFinance.com) - Liberum has upgraded Asos shares from 'sell' to 'hold', while reducing its target price from 500p to 470p, with the risk the UK online fashion specialist making a capital increase having now materialised.
"An £80m equity raise and £275m new debt facility (replacing the existing £350m RCF) may well help to improve flexibility with an extended duration (April 2026) and easier covenants but comes at the cost of 20% dilution and an 11% interest rate", the broker points out.
While a successful execution of the strategy could offer significant upside potential, Liberum believes that the execution risk remains high: "We therefore need more proof points before we turn positive" on the dossier.
Copyright (c) 2023 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
"An £80m equity raise and £275m new debt facility (replacing the existing £350m RCF) may well help to improve flexibility with an extended duration (April 2026) and easier covenants but comes at the cost of 20% dilution and an 11% interest rate", the broker points out.
While a successful execution of the strategy could offer significant upside potential, Liberum believes that the execution risk remains high: "We therefore need more proof points before we turn positive" on the dossier.
Copyright (c) 2023 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.