Boohoo Group PLC’s (LON:BOO) shares are “attractively valued” and the firm is making progress with achieving its ESG goals, according to analysts at RBC.
In a note on Tuesday, the bank upgraded the online fashion retailer to ‘outperform’ from ‘sector perform’ and raised its target price to 410p from 380p, forecasting that a “sustained online shift” and contributions from new brands should deliver revenues upgrades of between 5-10% for the firm.
READ: boohoo is undervalued, says City broker
RBC also said the concerns over Boohoo’s international growth were “perhaps overdone” and that they expected the performance of the group’s Rest of World segment to improve as comparatives and lockdown restrictions eased, which in turn could alleviate market concerns.
“We believe [Boohoo] shares are attractively valued here, particularly considering the potential for consensus upgrades and the stock's relative underperformance versus [Zalando] and [Asos]. We also take a more constructive view on long-term margins. The company's steps towards improving its ESG policies are credible and over time, we expect the shares to re-rate to reflect that,” the bank added.
Boohoo shares jumped 3% to 298.2p in mid-morning deals.