AO World (AO.)

Sector:

Retailers

Index:

FTSE 250

99.85p
   
  • Change Today:
      5.15p
  • 52 Week High: 433.50
  • 52 Week Low: 93.80
  • Currency: UK Pounds
  • Shares Issued: 479.52m
  • Volume: 773,514
  • Market Cap: £478.80m
  • RiskGrade: 268
  • Beta: 0.85

Jefferies takes a fresh look at AO World following 'unscheduled and disappointing' update

By Iain Gilbert

Date: Friday 01 Oct 2021

LONDON (ShareCast) - (Sharecast News) - Analysts at Jefferies reiterated their 400.0p target price on shares of AO World on Friday despite stating the firm was just another in a long line of retailers to face "challenging" 2020 comparatives.
AO World reported that group revenues for the six months to 30 September grew just 5% year-on-year and 66% on a two-year basis and added that it expects revenue growth in the second half to be at a similar rate to the first six months.

While Jefferies noted the half had been impacted by driver shortages and supply chain disruption, more concerningly, it said, was that the competitive environment in Germany seemed to have "stepped up markedly", with revenue growth of 3% well below its full-year estimates of 35% growth.

"With AO operating close to breakeven, its ability to grow in an environment of higher COCA and lower product margins appears to have been materially constrained. While management notes the strong 2yr growth rate (+84%), we are concerned that for AO to resume its targeted growth trajectory in Germany, there will either need to be: 1) some normalisation in the competitive dynamic, or 2) margin gains from suppliers to support AO's competitive positioning," said the analysts.

Combing through the firm's guidance, Jefferies stated AO's "unscheduled and disappointing" update implied a roughly £10.0m hit to full-year underlying earnings.

"We see the UK shortfall as fairly understandable, given well-known challenges around driver shortages, global supply chains, and the difficulties of predicting growth against demanding comparatives. The situation in Germany, however, is going to require deeper consideration - just as the model had appeared to be fixed, a new layer of competitive challenge seems to have emerged. Once again, AO has questions to answer regarding its international growth aspirations," concluded Jefferies.

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Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

Note 2: RiskGrade figures are provided by RiskMetrics.

 

AO World Market Data

Currency UK Pounds
Share Price 99.85p
Change Today 5.15p
% Change 5.44 %
52 Week High 433.50
52 Week Low 93.80
Volume 773,514
Shares Issued 479.52m
Market Cap £478.80m
Beta 0.85
RiskGrade 268

AO World Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
61.45% below the market average61.45% below the market average61.45% below the market average61.45% below the market average61.45% below the market average
73.91% below the sector average73.91% below the sector average73.91% below the sector average73.91% below the sector average73.91% below the sector average
Price Trend
75.28% below the market average75.28% below the market average75.28% below the market average75.28% below the market average75.28% below the market average
77.78% below the sector average77.78% below the sector average77.78% below the sector average77.78% below the sector average77.78% below the sector average
Income Not Available
Growth
88.48% above the market average88.48% above the market average88.48% above the market average88.48% above the market average88.48% above the market average
100.00% above the sector average100.00% above the sector average100.00% above the sector average100.00% above the sector average100.00% above the sector average

What The Brokers Say

Strong Buy 2
Buy 1
Neutral 3
Sell 0
Strong Sell 0
Total 6
buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

AO World Dividends

No dividends found

Trades for 01-Dec-2021

Time Volume / Share Price
11:49 87 @ 100.08p
11:47 844 @ 99.85p
11:47 576 @ 99.85p
11:41 325 @ 99.80p
11:41 134 @ 99.85p

AO World Key Personnel

CEO John Roberts

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