Berenberg slashes target price on Asos

Berenberg said there were few surprises in Asos' full-year numbers given its post-year-end trading update. However, new chief executive José Antonio Ramos Calamonte's "frank assessment" of the current shortcomings of the business highlighted a number of issues, as well as reasons for medium-term optimism.

"The CEO has a clearly defined set of near-term priorities with the aim of enhancing the customer offer and inventory management, improving order economics and streamlining the cost base, maintaining a robust balance sheet, and refreshing the leadership team and culture," said Berenberg.

The German bank noted that a comprehensive review of the company's model had "inevitably" left some short-term unknowns, but a key positive was increased confidence in Asos' balance sheet position.

"On our revised estimates, ASOS trades on 0.3x CY23 EV/sales and 17x P/E," said the analysts, who reiterated their 'buy' rating on the stock.

Reporting by Iain Gilbert at Sharecast.com