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ShoreCap downgrades Boohoo, says shares fairly valued

By Michele Maatouk

Date: Monday 20 May 2019

ShoreCap downgrades Boohoo, says shares fairly valued

(Sharecast News) - Shore Capital downgraded its stance on shares of online fast-fashion retailer Boohoo to \'hold\' from \'buy\' on Monday, saying the stock is fairly valued for now.
It said Boohoo\'s share price responded well to the recent results and over the past month, the stock has risen 21% in absolute terms, outperforming the AIM All Share index by almost 23% during that period.

\"In terms of valuation the shares trade on a one-year forward (year to February 2020F) price-to-earnings multiple of 45.2x and an EV/EBITDA multiple of 23.1x.

\"We believe that given the recent share price rise the shares look up with events, for now. In our valuation analysis we use a number of metrics, EV/sales, EV/EBITDA and P/E valuations, and blending these averages £2.47 per share. Given the current share price of £2.41, this suggests that the shares are fairly valued for now, and as a result we downgrade our recommendation.\"

Late last month, Boohoo reported a 38% jump in full-year pre-tax profit to £59.9m as revenue rose 48% to £856.9m, thanks in part to an \"exceptional\" performance from PrettyLittleThing.

At 1545 BST, the shares were down 1.5% at 237.60p.

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