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Berenberg raises target price on Superdry

By Iain Gilbert

Date: Tuesday 28 Sep 2021

Berenberg raises target price on Superdry

(Sharecast News) - Analysts at Berenberg raised their target price on clothing retailer Superdry from 235.0p to 280.0p on Tuesday but stated a "leap of faith" was required as the group's risk/reward balance was weighted very evenly.
Berenberg said the 2021 trading year was "a heavily disrupted year" for Superdry and noted that while top-line development remained "very subdued" in the first half of 2022, it did come alongside a shift towards a full-price stance, particularly in the company's e-commerce channel.

While the German bank highlighted that ultimately, should Superdry management deliver on its medium-term targets, there will be "significant upside" to the firm's current share price, it also said it remains "cautious" about the achievability of the company's "ambitious" targets.

"The company expects revenues to exceed peak historical levels (£872.0m) in the next three-four years. It also expects to return the business to pre-pandemic operating margins (low double-digit). Should the company reach these targets, there is likely material upside to the share price," said Berenberg.

"We, however, are more cautious, and forecast that full-year 2024 revenues will be circa 14% down from FY18 levels at a 6.5% adjusted EBIT margin. While we expect growth from the e-commerce and wholesale channels, and margin tailwinds from the return to a full-price stance and other cost savings, we expect store sales densities to settle circa 34% below FY18 levels given our expectation of a permanent shift to online, tempering both the sales and margin recovery."


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