ASOS PLC (LON:ASC) was upgraded to ‘hold’ from ‘sell’ by Shore Capital as analysts have a strong feeling the online fashion retailer has learned its lessons after last year’s string of profit warnings.
The deposed ‘king of AIM’, which will release a trading update at the end of January, “may well have done well this festive period”, although the City is aware the company benefits from weak year-on-year comparatives.
READ: Asos gets upgrade to 'buy' from HSBC as it "turns the corner"
Christmas updates so far from the rest of the sector have revealed a worsening trend in gifting, whereby consumers have been buying fewer but higher-quality items for their loved ones.
According to ShoreCap, it bodes well for those retailers who sell branded clothing, with ASOS set to emerge as one of the winners.
“All things considered we believe that ASOS has had a good festive period, learning the lessons from last year’s Black Friday fiasco,” analysts said in a note.
“Having rebased profits we are of the view that it baked in significant gross margin investment in Autumn 2019 and anecdotal comments from other retailers suggest it has done well this year.”
Shares, however, dipped 2% to 3,421p on Friday morning.