Deutsche Bank has slashed boohoo Group PLC’s target price by 40% but the bank still stuck with its ‘buy’ rating.
All eyes will be on outlook when boohoo report on its full-year results tomorrow, according to the broker, with “a more cautious tone” expected from management, both in sales progression and margin recovery.
Analysts at the German bank added that a slowdown in sales growth might be a big problem as demand for occasion wear and going out dresses are strong, with boohoo falling short of the growth expected.
As well as that, there may be “nagging doubt” from an investor viewpoint, with fears that margins will mirror that of competitor ASOS, especially with boohoo also going through a period of setting up international distribution centres.
Target price is now set at 140p, down from 230p, but the online fashion retailer keeps its 'buy' rating on the basis of the “fundamental fair value.”