Superdry PLC (LSE:SDRY) has been reiterated with a 'buy' rating by analysts at 'house' broker Liberum Capital following the clothing brand's recent half-year trading update.
The Liberum analysts pointed to three main factors to justify the buy rating - a robust trading performance underscored by 3.6% year-on-year revenue growth in the first half; a new £80mln loan facility; and the appointment of the “new, well-recognised auditor” RSM.
“Cash generation is strong with net debt falling £25mln since October 1 to £13mln as of December 20,” the Liberum analysts pointed out.
They added: “The recent cold weather and the high-quality AW22 range also give us confidence that sell-through in the peak trading period will be strong and interims to be announced in late Jan could provide signs of further progress on sales, cash and stock levels.
The Liberum analysts have a target price of 500p on Superdry shares which were trading at 122.8p on Wednesday afternoon.