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ASOS set to emerge a 'winner' amid shift to online, says Jefferies

By Michele Maatouk

Date: Wednesday 08 Apr 2020

ASOS set to emerge a 'winner' amid shift to online, says Jefferies

(Sharecast News) - Jefferies upgraded its stance on shares of online retailer ASOS to 'buy' from 'underperform' on Wednesday, saying that the company had acted "promptly" to raise more than ?200m equity on the back of good first-half results and was set to emerge from the coronavirus crisis a "winner".
"Combined with a ?60-80m revolving credit facility extension this gives ASOS enough liquidity to last a prolonged 18 month downturn," Jefferies said.

Structurally, it expects the Covid-19 outbreak to accelerate the shift to online, with ASOS set to benefit from high street closures. "Thus as one of the sector winners we raise ASOS from underperform to buy," it said.

Jefferies said the company's H1 results, out on Tuesday, were a beat and would have led to a pre-Covid upgrade. ASOS reported a 653% surge in interim pre-tax profit to a record ?30.1m as revenues grew 21% to ?1.6bn

"This reflects higher promotions, improved customer acquisition/reactivation, and better availability in the US/EU," Jefferies said.

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