Berenberg lowers target price on Asos

On an underlying basis, Asos reported revenue growth of 21% at constant currency, with growth once again particularly strong in the UK.

However, the German bank noted trading "was more mixed elsewhere". In Europe, Asos grew at 15% constant currency, with growth strong in France and much improved in Germany but relatively poor in areas of southern Europe. In the US, Asos grew at 20%, although Bernberg pointed out this came against a weak comparative.

Berenberg stated that while Asos was still "relatively cautious" in regards to near-term trading, with its UK business continuing to prove "exceptional" and its recent deal with Nordstrom likely to provide a tailwind to US performance, it thinks the medium- to long-term equity story for the stock "remains attractive".

"Asos' shares were down by circa 18% on the day of results, which we think is largely due to the company's commentary that trading in the last three weeks of P3 was more muted in light of continued Covid-19 uncertainty and unseasonal weather," said Berenberg.

But the analysts also pointed out that the two cited headwinds looked likely to reduce in the UK in the near-term, meaning it thinks upside risk still remained.

Berenberg also said cuts made to earnings per share estimates for the stock were partly due to interest attached to Asos' £500.0m convertible bond.