Berenberg reiterated its “buy” rating on the online retailer, and reduced its target price from 4,700p to 4,100p. The broker said that while currency headwinds are a near-term concern, a strong pound is factored into management guidance, and “the increasing utilisation of the Eurohub will increase the natural currency hedge”. It also predicts the Asos own-brand could generate £1bn in UK sales in the long term.
ASSOCIATED BRITISH FOODS
Barclays Capital maintained its “overweight” rating on the retail group, noting that although “all eyes are currently on Primark’s US expansion”, the European roll out is “still under appreciated”. The broker said it does not “expect the US to materially impact group profits for now”, but believes that the US may account for as much as 15 per cent of Primark’s enterprise value.