Broker tips: Plus500, ASOS
Analysts at Berenberg raised their target price on online stockbroker Plus500 from 860p to 1,033p on Wednesday but lowered their rating on the group from 'buy' to 'hold'.
Berenberg noted that "exceptional levels of volatility" in financial markets had driven substantial numbers of new customers to Plus500's platform in the first quarter, resulting in the company's highest number of quarterly active customers since the crypto asset bubble in 2017-18.
The German bank noted that this was mirrored in the financials, with Plus500's net revenue hitting $317m and underlying earnings coming in at $232m - up 230% and 309% quarter-on-quarter, respectively.
"The shares have been top performers on both a relative and absolute basis year-to-date, and will continue to benefit from volatile markets," said Berenberg.
"However, at the current price, we think that the shares are now fairly priced," added the analysts.
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.