Boohoo still has “uncertainties” around its investment case ahead its of preliminary results on Tuesday.
Analysts at Deutsche Bank lowered its target price to 45p from 50p for the online retailer, although it retained a 'hold' on the stock.
The investment bank believes boohoo, which is trading at just 10% of its peak value in 2020, is now competing in a much more competitive market.
Like competitor Asos, boohoo has decided to focus on profits instead of sales, a move the broker questions.
Boohoo’s ‘buy and build’ strategy has masked some of the weakness in its core business, Deutsche Bank added.
Further clarity on this strategy in Tuesday’s prelims would help the investment case, although Deutsche Bank concedes acquisitions look unlikely at this stage.
Full-year 2024 underlying earnings estimates have been reduced by 17% to £78mln by the bank.