Brokers note - ASOS
Shore Capital has re-iterated its Buy recommendation on ASOS following its preliminary results and subsequent 10% decline in its share price.Although the broker acknowledges the rate of sales growth may be slowing it regards this as an inevitable effect from the group's increased size and suggests the long term investment case for ASOS remains intact.
Shore Capital believes the recent share price fall represents a buying opportunity with the current PE an undemanding 18x 2009/10 earnings. It points to ASOS' sales growth potential and operational gearing benefits, which should see a doubling of earnings over the next two years as justification to retain its 'Buy' recommendation. Its share are up 1% today (July 1) at 383p.
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