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Brokers: ASOS to top the retail tree over Christmas

Published: 10:00 17 Dec 2015 GMT

ASOS

Christmas is such a key trading period for the retail sector that it is a brave broker that tries to predict the winners and losers in advance.

Peel Hunt has done it nonetheless and by and large expects most chains and online specialists to have a reasonably good festive period.

It sees potential winners in Boo.Com (LON:BOOSuperGroup (LON:SGP), JD Sports (LON:JD.), ASOS(LON:ASC) and Ted Baker (LON:TED).

Biggest concerns surround Sports Direct (LON:SPD), Halfords (LON:HFD) and Marks & Spencer (LON:MKS), with the last two seeing a target price reduction to 400p (from 450p) and 350p (from 415p).

ASOS is its favourite and gets an upgrade to ‘buy’ from ‘hold’ and an uplift in the target price 4,000p.

Boo and SuperGroup are the other nap picks, which suggests Peel Hunt thinks youth clearly is the way to go.

German broker Berenberg likes Domino’s Pizza (LON:DOM), which has been reinstated as a buy on the back of strong like-for-like sales momentum in the UK, the restructuring in Germany and the shares’ recent weakness. Price target rises by a third to £12.

UBS has slashed its price target for design engineering group Aveva (LON:AVV) after the collapse of the Schneider merger plan.

“The reality is that a sub-$40 Brent price creates far greater uncertainties as to both businesses' prospects in the short-to-medium-term,” said the broker.

It keeps a buy recommendation, but the price target is now 31% lower at 1,750p.

Barclays edged up its price for life insurer Legal & General (LON:LGEN) to 302p from 294p on the strength of its fund management operation.

Outsourcer Capita (LON:CPI) becomes a buy again for Deutsche Bank as it should outperform “in a low growth world”.

Growth will be at the low end of its historical range, but that is attractive versus more cyclical stocks reckons Deutsche. The target price is 1,270p.

Panmure Gordon has repeated its buy recommendation of hay fever vaccine specialist Allergy Therapeutics (LON:AGY) after manufacturing problems at one its European competitors.

Allergy had already been making market share gains in Europe says the broker, though it notes its products are mainly injected compared to  the orally-taken products the competitor supplies.

The broker’s target price for Allergy remains 51p.

Tidal power group Atlantis Resources (LON:ATR)  has allied itself with another major player in its filed in the shape of Scottish Power Renewables, says Peel Hunt.

It is now becoming an unavoidable leader in the sector and is even better placed to raise external finance.

Atlantis acquired two projects from SPR today and potentially they are worth as much as 34p per share.

“The deal also brings in another, highly credible industrial shareholder with deep skill sets, as well as positioning the company strongly for bringing in new investors into its projects,” said the house broker.

Its target price rises to 130p from 120p. Buy is its view.

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