ShoreCap downgrades Boohoo, says shares fairly valued
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.
Boohoo Group
34.20p
13:14 24/04/24
FTSE AIM 100
3,640.98
13:15 24/04/24
FTSE AIM All-Share
755.13
13:15 24/04/24
General Retailers
3,919.02
13:09 24/04/24
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.